What You Need to Know About Upcoming SDLT Changes in the UK

In the Autumn Budget of 2022, the UK government announced major changes to Stamp Duty Land Tax (SDLT) that are set to take effect from 1 April 2025. These adjustments will impact homebuyers across England and Northern Ireland, so it’s crucial to stay informed and prepare accordingly.

Key Stamp Duty Land Tax Changes Effective from 1 April 2025

1.Standard Residential Purchases:

• • Threshold Reduction: The nil-rate threshold will decrease from £250,000 to £125,000. This means SDLT will now apply to properties priced above £125,000.
  • Revised Rates:
    • 0% on the first £125,000
    • 2% on the portion from £125,001 to £250,000
    • 5% on the portion from £250,001 to £925,000
    • 10% on the portion from £925,001 to £1.5 million
    • 12% on any amount above £1.5 million

Example: If you purchase a property for £295,000 after 1 April 2025, the SDLT would be calculated as follows:

• • 0% on the first £125,000 = £0
  • 2% on the next £125,000 = £2,500
  • 5% on the remaining £45,000 = £2,250
  • Total SDLT Payable: £4,750

2. First-Time Buyers:

• • • Threshold Adjustment: The relief threshold will reduce from £425,000 to £300,000.
    • Revised Relief Rates:
      • 0% on the first £300,000
      • 5% on the portion from £300,001 to £500,000

Note: Properties priced above £500,000 will not qualify for first-time buyer relief and will be subject to standard rates.

3. Additional Properties (e.g., Second Homes, Buy-to-Let Investments):

• • Threshold Reduction: The nil-rate threshold will decrease from £250,000 to £125,000.
  • Revised Rates:
    • 5% on the first £125,000
    • 7% on the portion from £125,001 to £250,000
    • 10% on the portion from £250,001 to £925,000
    • 15% on the portion from £925,001 to £1.5 million
    • 17% on any amount above £1.5 million

Example: Purchasing an additional property for £300,000 after 1 April 2025 would incur SDLT as follows:

1. • 5% on the first £125,000 = £6,250
   • 7% on the next £125,000 = £8,750
   • 10% on the remaining £50,000 = £5,000
   • Total SDLT Payable: £20,000

These upcoming SDLT changes are expected to increase the tax burden on many homebuyers, especially first-time buyers and those purchasing additional properties. If you’re considering buying a property and want to complete the purchase before 1^st April 2025, it’s a good idea to consult with our expert team of Property solicitors or tax advisor first.