Providing expert mortgage advice for over 28 years.
Providing expert mortgage advice for over 28 years.
Major changes to Stamp Duty Land Tax (SDLT) will start on 1st April 2025. This will affect homebuyers in England and Northern Ireland. The adjustments may change how much it costs to buy a property. This could also influence your choice of which property to purchase. We’ve compiled a complete guide to the new SDLT changes and what they might mean for you.
Stamp duty is a tax you pay to the government when you buy property or land. The amount you pay depends on the property value and location. This tax is used to confirm legal documents. It also shows that you have paid for the property. This makes the purchase legally binding.
The SDLT limits went up for a short time in September 2022. They will change back to the old levels on 1st April 2025. Here are the main changes:
| Rate Valid Until 31st March 2025 | Rate From 1st April 2025 |
|---|---|
| 0% up to £250,000 | 0% up to £125,000 |
| 5% for amounts over £250,000 up to £925,000 | 2% for amounts over £125,000 up to £250,000 |
| 10% for amounts above £925,000 up to £1,500,000 | 5% for amounts above £250,000 up to £925,000 |
| 12% for amounts over £1,500,000 | 10% for amounts above £925,000 up to £1,500,000 |
| 12% for amounts over £1,500,000 |
| Rate Valid Until 31st March 2025 | Rate From 1st April 2025 |
|---|---|
| 0% up to £425,000 | 0% up to £300,000 |
| 5% for amounts over £425,000 up to £625,000 | 5% for amounts over £300,000 up to £500,000 |
These changes will increase stamp duty costs for many people buying homes. The amount of stamp duty you pay depends on the purchase price of the property. It also depends on whether this is your first home or if you are buying an additional property.
For a standard residential purchase of a freehold property that costs £500,000, SDLT will go up. After 1st April 2025, it will change from £12,500 to £15,000.
First-time buyers will see the nil-rate threshold decrease from £425,000 to £300,000. Additionally, the maximum purchase price eligible for First-Time Buyers Relief will drop from £625,000 to £500,000. Homes above £500,000 will no longer qualify for relief.
A new buyer who buys a property for £499,999 will have a higher SDLT cost starting 1st April 2025. The SDLT they pay will increase from £3,749 to £9,999.
Buyers of additional properties, such as buy-to-let homes or second houses, must pay an extra 5% surcharge on top of the regular SDLT rates for transactions completing on or after 31st October 2024.
Non-UK residents who buy homes in England or Northern Ireland will continue to pay an additional 2% SDLT surcharge on top of other applicable rates, including the increased surcharge for additional properties after 31st October 2024.
If you want to buy a property, consider the key dates to maximise your savings. For standard rates, completing before 1st April 2025, ensures lower SDLT. For Multiple Dwelling Relief ( MDR ), ensure contracts are exchanged by 6th March 2024, and transactions complete by 1st June 2024. For additional properties, completing before 31st October 2024, avoids the higher surcharge.
The average residential property transaction takes around 12 to 16 weeks to complete. Your specific circumstances and whether you are part of a chain can change this time. It is important to keep this timeline in mind when planning your purchase. This helps make sure you finish your transaction before the SDLT changes occur.
It can be tough to understand SDLT. This is why it’s smart to talk to property experts such as solicitors or conveyancers. They can guide you through the process. They will also go over your situation and show you how to potentially save money on taxes
To find out how much SDLT you need to pay, you can use our online stamp duty calculator. This tool comes from HM Revenue & Customs (HMRC). They consider several factors, such as the property value, whether you are a first-time buyer, and if you are buying an additional property.
The SDLT changes apply only to England and Northern Ireland. Scotland and Wales have their own property tax systems: the Land and Buildings Transaction Tax in Scotland and the Land Transaction Tax in Wales.
The property market and SDLT rules have seen many changes in recent years. One important change was the stamp duty holiday during the COVID-19 pandemic. Now, new changes are set to come in 2025.
Yes, there are still some exceptions and reliefs that will apply with the new stamp duty rules starting on 1st April 2025.
First-time buyers will keep enjoying lower rates. However, the limits will change.
The extra 2% fee for non-UK residents buying residential property will stay in place.
Multiple Dwellings Relief (MDR) will end for transactions completing, or substantially performing, on or after 1st June 2024. Purchasers who exchanged contracts on or before 6th March 2024, remain eligible for MDR, provided there is no variation to the contract after that date.
Transfers between spouses or civil partners usually do not have SDLT to pay. However, it is not clear if this rule still holds for transfers after 2025.
The changes to the stamp duty land tax in 2025 will have a big impact on buying a home in England and Northern Ireland. If you are a first-time buyer or looking to purchase a new home, it’s important to consider these changes. If you complete your purchase before 1st April 2025, you could potentially save hundreds of pounds on stamp duty.
Make sure to talk to property experts and use SDLT calculators to get help. Stay informed about news from HMRC or the UK government on any changes to the current rates. Remember, SDLT is important, but it shouldn’t be your only focus when buying property. Think about your long-term financial goals, mortgage rates, and the total value of the property. This will help you make a smart investment.
