Understanding the upcoming SDLT changes
Stamp Duty Land Tax (SDLT) is a government tax payable on purchase of property or land in England and Northern Ireland.
The amount payable depends on a variety of factors, such as the value of the property, the residency status of the buyer and whether the buyer has previously owned a property.
The Government had previously reduced SDLT rates on a ‘temporary’ basis, with a view to the current discounted rates ceasing on 31 March 2025 ‘as part of its commitment to fiscal responsibility and ensuring trust and confidence in our national finances’. It was confirmed in the recent budget that the new Government intends to observe this deadline.
As such, any transaction that completes after 31 March 2025 will be subject to the increased rates of SDLT.
The current tax-free amounts, before a buyer is liable for SDLT, are:
– For residential purchases – £250,000
– For first-time buyers (residential purchases) – £425,000 with a maximum property price of £625,000
Following the changes in March 2025, the thresholds will change to:
– For residential purchases it will return to £125,000
– For first-time buyers (residential purchases) it will return to £300,000 with a maximum property price of £500,000
By way of example, a first-time buyer who purchases a property for £425,000 will pay no SDLT on completion under the current rules. However, from 31 March 2025, the same first-time buyer will pay no SDLT on the first £300,000 but the balance of £125,000 will be taxed at 5%, meaning they will need to pay SDLT of £6,250.
The deadline of 31 march 2025 is fast approaching, and if you are considering purchasing a dwelling and would like to take advantage of the current SDLT rates, we would strongly recommend moving forward with your conveyancing as soon as possible: a normal residential transaction, from when solicitors are instructed, take approximately 12 weeks to complete and can sometimes take longer, depending on the characteristics of the transaction.
For further information, please contact our Residential Property Team. We are here to ensure your property transaction plans go as smoothly as possible.
