Chancellor Rachel Reeves announced changes to Stamp Duty Land Tax (SDLT) in the Autumn Budget that have increased the rates payable by buyers of additional properties and companies. Partner Daniel Broughton summarises the current SDLT rates and examines the new rates introduced with effect from 31 October 2024.
Overview of SDLT
SDLT is charged when you buy a residential freehold or leasehold property for a price that exceeds certain thresholds. The current thresholds are:
- £250,000 for residential property
- £425,000 for first-time buyers buying residential property worth up to £625,000.
Transactions for a purchase price below these thresholds are exempt, and no SDLT is payable.
The table below sets out the SDLT payable if you are buying a residential property in your personal name and it is the only residential property you own.
Rates up to 31 March 2025
Property or lease premium or transfer value | SDLT rate |
Up to £250,000 | Zero |
The next £675,000 (the portion from £250,001 to £925,000) | 5% |
The next £575,000 (the portion from £925,001 to £1.5m) | 10% |
The remaining amount (the portion above £1.5m) | 12% |
These rates are changing from 1 April 2025 and from this date will be as follows:
Rates from 1 April 2025
Property or lease premium or transfer value | SDLT rate |
Up to £125,000 | Zero |
The next £125,000 (the portion from £125,001 to £250,000) | 2% |
The next £675,000 (the portion from £250,001 to £925,000) | 5% |
The next £575,000 (the portion from £925,001 to £1.5m) | 10% |
The remaining amount (the portion above £1.5m) | 12% |
First-time buyer’s relief
First-time buyers buying before 31 March 2025 will pay no SDLT up to £425,000 and 5% SDLT on the portion from £425,001 to £625,000. If the price exceeds £625,000, you cannot claim first-time buyer relief.
From 1 April 2025, the relief changes, and first-time buyers will pay no SDLT up to £300,000 and 5% SDLT on the portion from £300,001 to £500,000. You will not be able to claim the relief if the price is more than £500,000.
Higher SDLT rates for buyers of additional properties and companies
If you buy a residential property for more than £40,000 after 31 October 2024 and before 1 April 2025 and it is not your only residential property, you must pay a 5% SDLT surcharge on the standard SDLT (as set out below). Before the Autumn Budget, the surcharge was 3%.
The same surcharge applies to companies and other non-natural persons (such as partnerships) buying property up to £500,000. On purchases over £500,000, companies pay a single rate of 17% (up from 15%).
Consideration | SDLT rate |
Up to £250,000 | 5% |
So much as exceeds £250,000 but does not exceed £925,000 | 10% |
So much as exceeds £925,000 but does not exceed £1.5m | 15% |
The remainder (if any) | 17% |
For such transactions on or after 1 April 2025, the rates are as follows:
Consideration | SDLT rate |
Up to £125,000 | 5% |
So much as exceeds £125,000 but does not exceed £250,000 | 7% |
So much as exceeds £250,000 but does not exceed £925,000 | 10% |
So much as exceeds £925,000 but does not exceed £1.5m | 15% |
The remainder (if any) | 17% |
Purpose of the SDLT increases
The government expects the higher rates of SDLT payable on purchases of residential property to “disincentivise the acquisition of second homes and buy-to-let properties, freeing up housing stock for main home and first-time buyers”. Whether this will be the case in practice and what impact this has on an already competitive rental market remains to be seen.
If you have any queries regarding SDLT on residential property, please contact Daniel Broughton at dbr@portner.co.uk.
For more information visit our website: https://www.portner.co.uk/
