Stamp Duty Land Tax and changes incoming Stamp Duty Land Tax and changes incoming Stamp Duty Land Tax and changes incoming Stamp Duty Land Tax and changes incoming Stamp Duty Land Tax and changes incoming

Stamp Duty Land Tax and changes incoming

Stamp Duty Land Tax is a tax that is levied by the Government on completion of a purchase of a property, building or land, whether it be residential or commercial.  It is a lump sum payment made by the buyer.  The amount of the liability due is dependent upon many factors, including; whether you are a UK resident, purchasing as an individual or a company, if this is your first purchase, replacing your main residence, or purchasing an additional property such as a buy to let or holiday home.

In September 2022, temporary measures were put in place following the impact that COVID had on conveyancing, in order to get the market moving again.  These measures are coming to an end, starting from the 1st April 2025.

At the time of writing this article, the stamp duty rates are as per the below table from HMRC:

Proportion of property value

Rate for main residence

Up to £250,000

0%

£250,001 to £925,000

5%

£925,001 to £1.5 million

10%

Over £1.5 million

12%

The above figures are based upon a standard residential purchase of a freehold property, where it will be your main residence, i.e. your home.

From the 1st April 2025, the changes that come into effect are as follows:

  • The nil rate threshold will return to the previous level of £125,000
  • The nil rate threshold for first time buyers will be reduced from £425,000 to £300,000
  • First Time Buyers relief will only be able to be claimed to a purchase price level of £500,000

As a result, the stamp duty rates from 1st April 2025 are as per the below table from HMRC:

Proportion of property value

Rate for main residence

Up to £125,000

0%

£125,001 to £250,000

2%

£250,001 to £925,000

5%

£925,001 to £1.5 million

10%

Over £1.5 million

12%

The changes that are being made will have the biggest impact on first-time buyers as the nil rate threshold is being reduced from £425,000 to £300,000.  First time buyers will have to pay 5% stamp duty land tax on anything above £300,000 and less than £500,000.  Once a purchase price is over £500,000, then no first-time buyer relief will be applicable and the purchaser will have to pay the full stamp duty land tax as per the above table.

Where you are purchasing an additional property, such as a buy to let or a holiday home, the changes in stamp duty land tax came into effect from the Autumn budget, much to many peoples dismay.  The change that occurred here was the additional rate of stamp duty was increased from 3% to 5%.  What this means is that an additional 5% is to be paid on top of the figures in the tables above.  For any second home owners or landlords purchasing buy to let properties, the stamp duty land tax percentages from 1st April 2025 onwards are as follows:

Proportion of property value

Rate for additional property

Up to £125,000

5%

£125,001 to £250,000

7%

£250,001 to £925,000

10%

£925,001 to £1.5 million

15%

Over £1.5 million

17%

Whilst we can provide you a figure for Stamp Duty Land Tax based on your circumstances, if you have a highly complex case, with many factors, we would advise you to seek independent financial advice from a SDLT tax specialist.

If you wish to discuss this further, or if you have any other property enquiries, please contact Lauren Still (MCILEX) of Rowberrys on 01344 959153 or l.still@rowberrys.co.uk.

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