Are you ready for the 2025 Stamp Duty Land Tax Changes?

Stamp Duty Land Tax (or SDLT) is a tax payable to HMRC when an individual or corporate entity buys property or land in England and Wales (in Wales, it's called the Land Transaction Tax).

SDLT uses thresholds for the calculation, so you pay an increasing percentage rate of SDLT according to the property's value. How much you pay also depends on factors including whether you're a first-time buyer, whether you will own any other property anywhere else in the world at the date of completion, and whether you're a non-UK resident.

In her most recent Budget statement, the Chancellor of the Exchequer announced changes to SDLT, which will come into force on 1st April 2025. If you're buying or considering buying a property at the moment, these changes could have a significant effect on the amount of SDLT payable. In this article, we'll tell you more about them.

 SDLT up to 31st March 2025

Up to 31st March 2025, the Stamp Duty Land Tax thresholds for single property transactions (a UK resident purchasing their main residence, not a first-time buyer) are as follows:

• Up to £250,000 - 0%

• £250,001 - £925,000 - 5%

• £925,001 - £1.5 million - 10%

• More than £1.5 million - 12%

Let's use some examples to illustrate this better:

If you buy a property valued at less than £250,000, you pay no SDLT at all.

If as a UK resident, non-first time buyer, you buy your property at £500,000, you would pay no SDLT on the first £250,000 but 5% on the remaining £250,000, which comes to £12,500.

Similarly, for a property worth £1,000,000, you would pay no SDLT on the first £250,000, 5% on the portion from £250,001.00 to £925,000.00, with 10% on the remaining portion from £925,001.00 to £1,000,00.00 totalling £41,250.

However, for other types of transactions, the SDLT percentages are slightly different.

• If you're a first-time buyer purchasing a property valued at less than £625,000, currently you would pay no SDLT up to £425,000 but 5% on the portion between £425,001 and £625,000,

• If you’re buying an additional property, you pay 5% on top of the current thresholds (e.g. £250,001 - £925,000 - 10%). If you sell your previous main residence within 36 months, you can apply to HMRC for a refund of the higher rate of SDLT. You would not however pay the additional 5% rate, if the property you’re buying is replacing your main residence and that property has already been sold.

• If you're a non-UK resident, you pay a further 2% surcharge on all purchases. There are however some exceptions to this, for which you may be able to claim relief.

There are strict deadlines to file the SDLT return to HMRC and pay the SDLT (or confirm that you don't have any SDLT to pay), with significant fines for non-compliance. Your conveyancing solicitor will notify you of your SDLT charges on your completion statement.

An excellent place to find out more information on SDLT is the Government's online SDLT calculator.

SDLT from 1st April 2025

The Chancellor announced significant changes to Stamp Duty Land Tax in her latest Budget. In most cases, it will result in purchasers paying more in SDLT.

The new thresholds for single property purchases (not a first-time buyer and UK resident) will be as follows:

• Up to £125,000 - 0%

• £125,001 - £250,000 - 2%

• £250,001 - £925,000 - 5%

• £925,001 - £1.5 million - 10%

• More than £1,500,001 - 12%

There are changes for first-time buyers too. Currently, a first-time buyer will not pay SDLT on a purchase price up to £425,000, with 5% SDLT payable on the portion from £425,001 up to £625,000. Furthermore, if the purchase price is over £625,000, then first-time buyer’s relief cannot be claimed. Under the new rules coming into effect on 1st April 2025, a first-time buyer will not pay SDLT on a purchase price up to £300,000, with 5% SDLT due upon the portion from £300,001 to £500,000. If the purchase price is over £500,000 then first-time buyer’s relief cannot be claimed.

There are slightly different SDLT rules and rate calculations for corporate bodies, where a new lease is granted to a leaseholder, people buying 6 or more residential properties in one transaction, shared ownership properties and companies & trusts buying residential property.

Why you need a good solicitor on your side

As you can see, Stamp Duty Land Tax can appear quite complex, particularly if you're not making a standard property purchase. When you buy a property, you rely on your solicitor to calculate the SDLT on your transaction and transfer it to HMRC in time, so you can avoid a fine.

However, with these changes coming in, having a good conveyancing solicitor in your corner has never been more important. So if you are hoping to take advantage of the current SDLT rates, you must complete your transaction by the end of March 2025. Your solicitor will be able to explain the changes and the benefits of completing your purchase as soon as possible. Here at Couchman Hanson, we will do everything possible to ensure that deadlines are achieved.

When you've completed on your purchase before the end of March 2025, you'll be glad you chose a great solicitor to help you.

 Find out more from Couchman Hanson

At Couchman Hanson, our solicitors genuinely care about getting the best outcome for you. We're highly professional, with 'city' level talent and experience, but also friendly and welcoming. Everything we do fits with our values of integrity, honesty and authenticity.

 Call 01428 774756 or visit couchmanhanson.co.uk.