Amendments to Stamp Duty Land Tax (SDLT)

What is SDLT? 

SDLT is a tax payable on the purchase of property in England and Northern Ireland.

It must be paid within 14 days of legal completion of your purchase.

Wales has its own version, called Land Transaction Tax (LTT). Similarly, the purchase of property in Scotland is subject to Land and Buildings Transaction Tax (LBTT).

What are the current thresholds?

There are different thresholds that apply depending on the value of the property you are purchasing.

For standard rate SDLT:

Currently, you do not pay SDLT on the first £250,000 of the purchase price. This means if you buy a property for £250,000 or less, subject to the exceptions below, you will not pay any SDLT.

Between £250,001 to £925,000, you pay 5% SDLT.

Between £925,001 to £1.5 million you pay 10% SDLT.

Over £1.5 million, you pay 12% SDLT.

Note however, different rates apply if you are a first-time buyer, if you are purchasing a second (or additional) property, are purchasing as a company or if you are not resident in the UK.

Previously, if you already owned a property and were buying an additional property (for example a second home or buy to let) or were purchasing a property in the name of a company, an additional 3% surcharge was applicable. This was on top of the standard SDLT rates.

For example, if you purchased an additional freehold property as a second home or a buy to let for £300,000, you would have paid £11,500 in SDLT. See a breakdown below:

3% on £250,000 = £7,500

8% on £50,000 = £4,000

Total = £11,500

If you (as an individual) are not present in the UK for 183 days or more in the 12 months before your purchase, you are treated as a non-UK resident for SDLT. A 2% surcharge is then applied to the SDLT on top of the standard rate SDLT.

First time buyers (subject to meeting the relevant criteria) do not currently pay SDLT on the first £425,000 of the property value, and 5% on the next £200,000 (the portion of the property value from £425,001 to £625,000).

What has changed/is changing following the Budget?

The Autumn Budget 2024 has amended SDLT for additional property purchases (and company purchases) from 31^stOctober 2024, the surcharge has increased from 3% to 5%.

Now, if you purchase an additional freehold property as a second home or a buy to let for £300,000, you will pay £17,500 in SDLT. See a breakdown below:

5% on £250,000 = £12,500

10% on £50,000 = £5,000

Total = £17,500

1^st April 2025

The standard SDLT thresholds are changing. From 1^st April 2025, you will not pay SDLT on the first £125,000 of your property value. This means if you buy a property for £125,000 or less, you will not pay SDLT. You will then pay 2% SDLT on the portion of the property value from £125,001 to £250,000.

The first-time buyer nil rate band is reducing from £425,000 to £300,000.

SDLT can be a complex tax and it is always advisable to seek expert advice in this respect.

To read more about SDLT and the recent Budget, follow the links to the Gov.UK website below:

Autumn Budget 2024 (HTML) – GOV.UK

Stamp Duty Land Tax: Overview – GOV.UK