Stamp Duty Land Tax (SDLT) rates are changing from 1st April 2025, when the temporary increases to the SDLT thresholds come to an end. Whilst this change will impact everyone planning to move, first-time buyers will be the most affected. We explain below…
What is Stamp Duty Land Tax?
SDLT is a levy that you pay to HMRC when you are buying a property. In England, how much you’ll pay depends on whether this is your first property purchase, how much you are paying for it and whether or not it is your only property.
It is always the buyer who pays stamp duty, not the seller, and usually your conveyancer will calculate and arrange payment of your stamp duty on your behalf as part of the purchase process.
It is a requirement of mortgage lenders that conveyancers should hold the stamp duty funds before they use the mortgage funds to complete a property purchase. You may be charged penalties and interest if you do not file your SDLT return and make your payment within 14 days of completion.
How SDLT is changing
In 2022, the Government announced a temporary change to stamp duty, to support the housing market. These measures will end on 31 March 2025.
From 1st April 2025, there will be several changes coming into effect:
- The nil rate threshold from SDLT, which is currently £250,000, will return to £125,000. From £125,001 to £250,000 the SDLT rate will be 2%.
- The nil rate threshold for first-time buyers, which is currently £425,000 will return to the previous level of £300,000. 5% SDLT will need to be paid on the portion from £300,001 to £500,000.
- The maximum purchase price for which First-Time Buyers Relief (a reduced stamp duty rate) can be claimed is currently £625,000 and will return to £500,000.
To qualify as a first-time buyer, you must be buying a single dwelling which you intend to be your main residence. It must also be the first dwelling that you have owned in the UK or anywhere else in the world. If you have previously been gifted or inherited a residential property or intend to use your new property as a buy-to-let investment, you will not be eligible for first-time buyer SDLT relief.
It is worth noting that even if there is no SDLT to pay, a return must still be completed and submitted to HMRC.
You can access a free SDLT calculator here.
SDLT on properties that are not your main residence
SDLT is payable on all properties that are not your main residence, and you usually pay 5% on top of the standard SDLT rate if you own another residential property.
From April 2025 there will be an additional charge of 2% for the portion between £125,000 and £250,000 which will further add cost to these types of purchases.
Can I claim back SDLT?
You may be able to claim a stamp duty refund if you sell your main home within three years of completing on a new home. The refund is the 5% surcharge for owning two or more properties. To claim a refund you will need to apply via this link with a copy of the Stamp Duty land Tax Certificate 5 which has the reference number for the original payment. The conveyancer who acted at the time of the purchase can provide a copy of this to you.
How we can help
THP Solicitors residential property team, one of the largest and fastest growing in the Thames Valley, focused on service, communication and the application of a common-sense approach to getting the job done with as little stress as possible for everyone involved.
We act for a wide range of clients from first-time buyers to clients who own portfolios of buy-to-let properties. Our fees are transparent and reflect the service we promise. We are members of The Law Society’s Conveyancing Quality Scheme and are on the panels of all major the lenders.
For further information or legal advice on buying or selling a property, please contact our Residential Property team on email ResidentialQueries@THPSolicitors.co.uk