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Following the Autumn Budget on 30 October 2024, solicitors and residential property purchasers have been acclimatising to the new stamp duty land tax rules.
Our Residential Property Solicitors explore what the new SDLT rules could mean for you.
What is stamp duty land tax?
Stamp Duty Land Tax (SDLT) is a tax payable by a purchaser on land tax transactions in England.
It is a personal tax, and the calculation depends on your individual circumstances.
Within fourteen days of completion, your solicitor will file your return with HM Revenue and Customs and settle any duty payable.
Since September 2022, home buyers in England and Northern Ireland have benefitted from a 'stamp duty holiday'. This was introduced during the pandemic to keep up the momentum in the residential property market.
The successful initiative temporarily increased the thresholds at which home buyers would owe stamp duty on the value of their property.
However, this will come to an end on 31 March 2025.
What changes were announced?
Second homeowners
If you own another property and are liable to pay an 'additional' rate SDLT, the 5% (rather than 3%) surcharge now applies for completions from 31 October 2024.
Good news? If you have exchanged contracts before 31 October 2024, and the completion date falls before 1 April 2025, the original 3% rate still applies.
In addition, corporate bodies, for example, companies and collective investment schemes purchasing residential properties for more than £500,000, must pay SDLT charged at 17% (rather than 15%) on residential properties from 31 October 2024.
First-time buyers
The First-Time Buyer relief band will change from 1 April 2025.
Currently, there is no SDLT to pay on a purchase price up to £425,000 and 5% on the portion from £425,001 to £625,000.
There is no relief available beyond £625,000.
However, from 1 April 2025, the thresholds will change.
There will be no SDLT to pay if the purchase price is up to £300,000 and 5% on the portion from £300,001 to £500,000.
There will be no relief available beyond £500,000.
What are the likely impacts of these changes?
In the long term? The Labour government have shared an optimistic vision for the residential property market.
They are taking action to boost the industry, for example, confirming £56 million of investment to unlock over 2,000 new homes at Liverpool Central Docks and a £25 million investment to deliver 3,000 energy-efficient properties.
The government hope that the SDLT changes will indirectly impact first-time buyers and those purchasing their primary residence by making it more expensive for landlords to buy additional properties.
In the short term? We expect a flurry of activity in the typically quieter winter months.
We anticipate buyers will want to accelerate their transactions to benefit from the current thresholds.
At Myerson, we are experienced in dealing with fast-paced residential transactions without compromising the quality of our service.
Contact Our Residential Property Solicitors
Whether you are a first-time buyer or an experienced landlord, we can help you complete your residential property transaction promptly.
At Myerson, our Residential Property solicitors keep our eye on the latest government legislation and will confidently navigate the evolving legal landscape for you.
Contact us on:
01619414000
Laura Higgins
Solicitor
Laura has experience acting as a Residential Property solicitor. Laura has experience in a wide range of residential property transactions, including freehold and leasehold sales and purchases, Transfers and Assents.
About Laura Higgins >