What is Stamp Duty Land Tax?
Stamp Duty Land Tax, commonly known as SDLT, is a tax on property and land purchases in England.
This is a tax is levied by H M Revenue and Customs (HMRC).
You pay the tax when you:
- buy a freehold property;
- buy a new or existing leasehold;
- buy a property through a shared ownership scheme;
- are transferred land or property for payment, for example you take on a mortgage or buy a share in a house.
How much you pay depends on:
- whether the land or property will be used as a residential property or as a non-residential or mixed-use property;
- whether you are eligible for a relief or an exemption. For example, if you’re buying a residential property there are different rates of SDLT if:
- you’re a first-time buyer;
- you already own a property and you’re buying an additional property;
- you’re not a UK resident.
Stamp Duty must be paid within 14 days of completion of the transaction and your solicitor / conveyancer will deal with this for you.
What are the changes?
In September 2022 the Government increased the 0% stamp duty land tax threshold band on residential properties from £125,000 to £250,000 in order to support the housing market during the pandemic.
The intention was to lower the upfront costs of moving home and support those looking to get on and up the housing ladder. However, this was only a temporary measure, and in the Autumn 2024 Budget, the government announced that this measure will end on 31st March 2025 with the threshold going back down to the pre-Covid level of £125,000 on 1st April 2025.
Stamp Duty Rates for a single property 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 £1.5 million) | 10% |
The remaining amount (the portion above £1.5 million) | 12% |
Stamp Duty Rates for a single property 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 £1.5 million) | 10% |
The remaining amount (the portion above £1.5 million) | 12% |
First time Buyers Relief
The nil-rate threshold for First Time Buyers’ Relief was also temporarily increased in 2022 from £300,000 to £425,000 and the maximum property value that is eligible for First Time Buyers’ Relief was increased to £625,000 from £500,000.
On 1st April 2025 the threshold will revert back to £300,000 and the maximum property value will revert back to £500,000.
Summary
The return of Stamp Duty rates to their previous levels in March 2025 is important to factor in for anyone involved in property transactions - if you are purchasing, then please consider whether you will be able to meet the increase in stamp duty payable on your transaction.
You can use HMRC stamp duty land tax calculator to work out how much tax you’ll pay, or alternatively please feel free to contact us for further information.
If you have any queries regarding these SDLT changes, moving home, buying your first home or investing in additional properties, contact a member of our Conveyancing Team on 01606 48777 for a chat.
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