No more holiday for SDLT from 31 March 2025
In the 2022 autumn statement, it was announced that there would be a temporary increase in Stamp Duty Land Tax thresholds for residential property until 31 March 2025:
- The 0% band was increased from £125,000 to £250,000.
- The nil-rate threshold for First Time Buyers’ Relief was increased from £300,000 to £425,000, with an increase in the maximum property value from £500,000 to £625,000.
However, this date is now fast approaching and the thresholds are due to come back down, so residential property purchasers are looking to bank the maximum savings (£8750 as a first-time buyer or £2500 as a non-first time buyer) by completing by 31 March.
For instance, if you are purchasing a property valued at £625,000 your SDLT would be calculated as follows, depending on whether you complete before or after 31 March 2025:
Not as first-time buyer:
Before 31 March 2025: £250,000 x 0% + £375,000 x 5% = £18,750 of SDLT
After 31 March 2025: £125,000 x 0% + £125,000 x 2% + £375,000 x 5% = £21,250 of SDLT
As first-time buyer:
Before 31 March 2025: £425,000 x 0% + £200,000 x 5% = £10,000 of SDLT
After 31 March 2025 £21,250 as above
Once the thresholds come back down, the maximum saving for a first-time buyer on a property of £500,000 will be reduced to £6,250. Therefore first-time buyers who are in the process of purchasing a property at this price, should aim to complete their purchases by 31 March where possible.
Surcharged properties
The cost of surcharges are now very significant, with the second property surcharge for properties in England and Northern Ireland having increased from 3% to 5% in the Autumn 2024 budget with effect from 31 October 2024. This increase, combined with the 2% surcharge for non-residents, can make the top rate of SDLT up to 19%. Taking advice to determine if you are caught by surcharges early on is important to ensure you are not caught out as you get nearer to your property completion date.
You can view the changes to residential property rates here. There is also more information about the surcharge and other aspects of property taxes for landlords here.
