Non-Residents Buying Now To Still Benefit From Stamp Duty Holiday

A new stamp duty surcharge has been introduced for overseas investors by the Government, adding thousands to non-residents’ stamp duty bills.

From 1st April 2021, a new Stamp Duty Land Tax (SDLT) surcharge applies to residential property purchases by non-UK residents. The charge adds an additional 2% to all freehold and leasehold property sales as well as grants of leases, for residential property in England and Northern Ireland.

The surcharge will also apply to purchases by companies that are controlled by non-UK residents, although certain exceptions apply - which means the highest rate of SDLT is now 17%.

If you’re purchasing a property jointly, the surcharge will be payable even if only one of you is a non-UK resident.

A non-resident is defined as not being in the UK for at least 183 days during the 12 months preceding the purchase. Although the surcharge only applies to properties purchased in England or Northern Ireland, for the residence test, your presence in any part of the UK will qualify you as a resident.

Residential property experts at leading national law firm Irwin Mitchell say there are still opportunities for overseas investors to benefit from tax breaks in the UK, citing the stamp duty holiday as an attractive option.

Expert Opinion

“The SDLT surcharge that was announced last year has now arrived, making property purchases for non-residents more expensive.

“It’s important that anyone thinking of moving back to the UK and who wants to buy a property isn’t put off by the new surcharge, as you can claim a refund on it if you meet the residence requirements within a year of the property’s completion date.

“At the moment we have the stamp duty holiday in place until October which non-UK residents can benefit from up to £500,000 – reducing their stamp duty from up to 7% to as low as 2% until June, then tapering off until October.

“The main concern going forward is that transactions can still happen smoothly and without any administrative hold-up, given the country is beginning to open up again after the pandemic and will be keen to seek investment in light of Brexit.” Helen Hutchison - Partner & Chartered Legal Executive

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