If you’re thinking about buying a house, whether you fancy moving on or for rental purposes, then it’s worth remembering that we are still enjoying a tax break on Stamp Duty Land Tax (SDLT) for residential property purchases through to 30 September 2021.

The way this works is that the nil rate band on residential property has increased from £125,000 to £500,000 which means that it applies to all purchases, including those for properties above £500,000, rental properties, and even holiday homes. You may of course still have SDLT to pay, particularly if the newly purchased property is not your main residence, but at least you’ll find these costs are currently lower.
With the threshold set to reduce to £250,000 from 1 July through to 30 September, it’s worth making any property purchase-related decisions soon before the rates return to their less advantageous previous levels.

Non-UK residents

If you are a non-UK resident, you could now have to pay a higher level of SDLT when you buy a UK property. From 1 April this year, there is a further 2% surcharge applicable to residential property. Confusingly, you’ll need to understand whether you could be deemed non-resident specifically for SDLT purposes, which could be different to the parameters that apply for Income Tax and Capital Gains Tax (CGT) rules. The SDLT rules revolve around how many days you have spent in the UK during the 12 months before you buy the property. If you are unsure about your non-resident status and how the rules might apply to you, then please get in touch.

Reporting and paying tax within 30 days of house sales

If you’re purchasing a house, it’s possible that you are selling one too and with the rule changes that came into force on 6 April 2020, it might be the case that you need to file a return with HMRC within 30 days of the sale. If the property is your “principal private residence” – your only or main home that you have always lived in, then a return shouldn’t be necessary. However, if it was a second home or a rental property then you may need to complete and submit a return. Furthermore, if you have CGT to pay, this has to be calculated on this return and paid within 30 days of the house sale.

If you are thinking of buying or selling a property, we can help you make sure that you’ve got the tax side of things in order. Just call Kate Naylor on 0113 297 6825 or send her an email

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Kate Naylor
Kate Naylor
Tax Partner

Kate works with businesses and their owners on tax strategies and mitigation, looking at business and personal tax structures to achieve long term goals.

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