What was the SDLT nil-rate threshold during the initial temporary relief period under the Stamp Duty Land Tax (Temporary Relief) Act 2020?

The SDLT nil-rate threshold was temporarily raised from £125,000 to £500,000 for residential property transactions with an effective date between 8 July 2020 and 30 June 2021. This meant no SDLT was payable on the first £500,000 of the purchase price, with reduced rates of 5%, 10% and 12% on successive bands above that amount.

How did the 3% additional dwellings surcharge apply during the SDLT temporary relief period?

The 3% surcharge for additional dwellings continued to apply on top of the temporarily reduced rates. During the relief period, purchasers of additional dwellings paid 3% on the first £500,000, 8% between £500,001 and £925,000, 13% between £925,001 and £1,500,000, and 15% on amounts above £1,500,000.

Why was first-time buyer relief suspended during the SDLT temporary relief period?

First-time buyer relief was suspended because the temporary nil-rate band of £500,000 was higher than the existing first-time buyer relief threshold. First-time buyers already received a greater or equal benefit from the enhanced nil-rate band, making the separate first-time buyer relief provisions unnecessary during the temporary period.

What happens if a contract was substantially performed during the SDLT relief period but completed by conveyance afterwards?

Section 1(6) protects buyers in this situation. Where substantial performance occurred during the relief period but formal completion happened after it ended, the later conveyance is not treated as a separate transaction solely because the temporary rates no longer apply or because Finance Act 2025 increased rates would apply. The buyer is not penalised for the change in law.

Stamp Duty Land Tax (Temporary Relief) Act 2020 section 1

Reduced rates of SDLT on residential property for an initial temporary period

Section 1 introduces temporarily reduced SDLT rates for residential property transactions completing between 8 July 2020 and 30 June 2021, raising the nil-rate threshold from £125,000 to £500,000.

The nil-rate band for residential SDLT was increased to £500,000 for the initial temporary relief period from 8 July 2020 to 30 June 2021
Standard residential rates during the relief period were 0% up to £500,000, then 5%, 10% and 12% on successive bands; the 3% additional dwellings surcharge continued to apply on top of these reduced rates
First-time buyer relief was suspended during the temporary period because the increased nil-rate band already provided a greater or equal benefit
Where a contract was substantially performed during the relief period but completed by conveyance afterwards, the later conveyance is not treated as a separate transaction solely because the temporary relief no longer applies or because the increased rates introduced by Finance Act 2025 would apply to it

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