What is Stamp Duty Land Tax?

Stamp Duty Land Tax (SDLT) is tax levied by HMRC on certain house and land transactions in England and Northern Ireland. Scotland and Wales have a different land tax system.

SDLT, becomes payable on transactions when the chargeable consideration (i.e the sale price paid on completion or lump sum payment for a transfer of equity) exceeds a certain threshold and under certain legal criteria. Such land transactions can include purchasing a property or acquiring an interest in a property or land. SDLT is calculated using a tiered system, with progressively higher rates applied to higher portions of the property / land’s sale price / value.

Autumn Budget Changes

Additional Properties

Under the recent budget, the most notable change is to the SDLT paid for second homes and investment properties. There was already a surcharge on the rate which meant that purchasers of these properties paid extra stamp duty.

Individuals purchasing a second home / investment property must therefore now pay an increased surcharge of 5% rather than the previous 3%. This means that for a £300,00.00 second property the SDLT payable will rise from £11,500 to £17,500 and for a £500,000.00 investment property the SDLT payable will rise from £15,000.00 to £25,000.00.

The current rates of SDLT for additional properties (second homes / investment properties) are now:

Up to £250,000 consideration = 5%

The next £675,000 (i.e. the portion from £250,001 to £925,000)= 10%

The next £575,000 (i.e.the portion from £925,001 to £1.5 million) = 15%

Anything over £1.5 million = 17%

If Contracts were exchanged before 31 October 2024 but completed on or after that date, the previous rates still apply subject to certain exclusions.

Main residence threshold

In 2022 the Government had increased the SDLT liability threshold for main residences to £250,000.00, however this is due to revert to the previous threshold of £125,000.00.

The reverted thresholds will be as follows:

Up to £125,000.00 = 0%

£125,001.00 to £250,000.00 = 2%

£250,001.00 to £925,000.00 = 5%

£925,000.00 to £1.5 million = 10%

Anything over = 1.2%

First-time buyer threshold

In addition to the above, the first time buyers SDLT relief threshold will be reduced to £300,000.00 from 31 March 2025, meaning that any first time buyers purchasing a property over £300,000.00 will be subject to SDLT at a rate of 5%.  

SDLT is a highly complex area of property tax and it is important that before proceeding with any property or land transaction advice is sought from an SDLT expert or accountant.

Please contact our Property Department for more information.