How does SDLT Multiple Dwelling Relief change after end June for house purchase with annexe

Lornsy

Regarding Multiple Dwelling Relief on annexes I wondered if there are views / expertise out there on how the end of the stamp duty holiday affects things.

We've been told (and my notes / queries in capitals):

From 1 July more of the consideration would be taxed at the rate of 5%.  HOW DOES THIS WORK?

On a price of £699,000 (assuming the 3% surcharge doesn’t apply – you should check whether this has already been confirmed by your conveyancer CHECKED, THE SURCHARGE DOESN'T APPLY AS WE HAVE RENTALS BUT ARE REPLACING OUR MAIN HOME)

Completion by 30 June 2021 - SDLT £9,950, or with MDR £6,990

Completion between 1 July to 30 September – SDLT £22,450, or with MDR £9,950

So does anyone know how the 5% works? And why? And would we just fill in SDLT1 the same way? i.e. code 33 at panel 9.

Also how long do I have to do this, if it isn't all done at the time of the purchase? 

(BTW we are confident our annexe will qualify, as it's less than a third of the overall valuation and there is no route into it other than it's own front and rear doors).

Thanks!

Lornsy

Bump - hope someone can help! 

[Deleted User]

Lornsy said:

Regarding Multiple Dwelling Relief on annexes I wondered if there are views / expertise out there on how the end of the stamp duty holiday affects things.

We've been told (and my notes / queries in capitals):

From 1 July more of the consideration would be taxed at the rate of 5%.  HOW DOES THIS WORK?

On a price of £699,000 (assuming the 3% surcharge doesn’t apply – you should check whether this has already been confirmed by your conveyancer CHECKED, THE SURCHARGE DOESN'T APPLY AS WE HAVE RENTALS BUT ARE REPLACING OUR MAIN HOME)

Completion by 30 June 2021 - SDLT £9,950, or with MDR £6,990

Completion between 1 July to 30 September – SDLT £22,450, or with MDR £9,950

So does anyone know how the 5% works? And why? And would we just fill in SDLT1 the same way? i.e. code 33 at panel 9.

Also how long do I have to do this, if it isn't all done at the time of the purchase? 

(BTW we are confident our annexe will qualify, as it's less than a third of the overall valuation and there is no route into it other than it's own front and rear doors).

Thanks!

Currently there is a SDLT holiday on the first £500,000 of the purchase price and that holiday ends 30th June 2021. If you complete the purchase before the end of this month you’d only pay 5% SDLT on the remainder of the purchase price which would be £9,950. 

From 1st July to 30th September 2021 the holiday reduces to the first £250,000 so more of the purchase price will be taxed at the 5% rate. Then from 1st October 2021 the SDLT rates are expected to return to normal where only the first £125,000 is not subject to SDLT. 

Lornsy

Hi thank you @Lover_of_Lycra but it was the annexe part I was trying to understand.

So:

Completion by 30 June 2021 - SDLT £9,950 (main purchase), or with MDR £6,990 - reduced a further £2960 by MDR

Completion between 1 July to 30 September – SDLT £22,450 (main purchase), or with MDR £9,950 - reduced a further £12,500 by MDR - so just trying to understand why the MDR increases so much.