Are you aware of the next Stamp Duty Land Tax Deadline which ends on 31st March 2025?
What is Stamp Duty Land Tax?
You must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price in England and Northern Ireland.
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. You usually pay Stamp Duty Land Tax (SDLT) on increasing portions of the property price when you buy residential property, for example a house or flat.
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.
Use the SDLT calculator or check the higher rates to work out how much tax you’ll pay.
Rates for a single property
You pay SDLT at these rates if, after buying the property, it is the only residential property you own. You usually pay 5% on top of these rates if you own another residential property.
Rates 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% |
Example
In October 2024 you buy a house for £300,000. The SDLT you owe will be calculated as follows:
0% on the first £250,000 = £0
5% on the final £50,000 = £2,500
Rates 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% |
Example
In April 2025 you buy a house for £300,000. The SDLT you owe will be calculated as follows:
0% on the first £125,000 = £0
2% on the second £125,000 = £2,500
5% on the final £50,000 = £2,500
total SDLT = £5,000
New leasehold sales and transfers
When you buy a new residential leasehold property you pay SDLT on the purchase price of the lease (the ‘lease premium’) using the rates above.
If the total rent over the life of the lease (known as the ‘net present value’) is more than the SDLT threshold (currently £250,000), you’ll pay SDLT at 1% on the portion over £250,000.
From 1 April 2025 the SDLT threshold will change to £125,000.
This does not apply to existing (‘assigned’) leases.
If you’re buying your first home
You can claim a discount (relief) if the property you buy is your first home. You’re eligible if you and anyone else you’re buying with are first-time buyers.
The discount you can claim depends on when you purchase the property.
Discount up to 31 March 2025
You’ll pay:
no SDLT up to £425,000
5% SDLT on the portion from £425,001 to £625,000
If the price is over £625,000, you cannot claim the relief. Follow the rules for people who’ve bought a home before.
Example
You are a first-time buyer and purchase a property for £500,000. The SDLT you owe will be calculated as:
0% on the first £425,000 = £0
5% on the remaining £75,000 = £3,750
total SDLT = £3,750
Discount from 1 April 2025
You’ll pay:
no SDLT up to £300,000
5% SDLT on the portion from £300,001 to £500,000
If the price is over £500,000, you cannot claim the relief. Follow the rules for people who’ve bought a home before.
Example
You are a first-time buyer and purchase a property for £500,000. The SDLT you owe will be calculated as:
0% on the first £300,000 = £0
5% on the remaining £200,000 = £10,000
total SDLT = £10,000
Higher rates for additional properties
You’ll usually have to pay 5% on top of SDLT rates if buying a new residential property means you’ll own more than one.
If you’re replacing your main residence
You will not pay the extra 5% SDLT if the property you’re buying is replacing your main residence and that has already been sold.
If you have not sold your main residence on the day you complete your new purchase you’ll have to pay higher rates. This is because you own 2 properties.
You can apply for a refund if you sell your previous main home within 36 months.
Rates if you’re not a UK resident
If you’re not present in the UK for at least 183 days (6 months) during the 12 months before your purchase you are ‘not a UK resident’ for the purposes of SDLT.
You’ll usually pay a 2% surcharge if you’re buying a residential property in England or Northern Ireland.
You may not have to pay a surcharge on certain properties, transactions or if you’re a particular type of buyer.
Conclusion
The upcoming changes to Stamp Duty in the UK are set to make a significant impact on the housing market, particularly for first-time buyers. While the government's intention is to generate more revenue, the increased costs could deter new buyers. For those looking to enter the market, understanding these changes and planning accordingly will be key.
Author:
Lubomir Trizuliak, MA, MBA
Founder of key4you
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