Stamp Duty Land Tax (SDLT) is a tax imposed on property and land transactions in England and Northern Ireland. It applies when you purchase a residential property or land above a certain value. The amount payable depends on the property’s purchase price and the buyer’s circumstances.
Current SDLT Rates (Effective Until 31 March 2025):
- Residential Properties:
- Up to £250,000: 0%
- £250,001 to £925,000: 5%
- £925,001 to £1.5 million: 10%
- Above £1.5 million: 12%
- First-Time Buyers:
- Up to £425,000: 0%
- £425,001 to £625,000: 5% on the portion above £425,000
- Above £625,000: Standard rates apply
- Additional Properties (e.g., second homes or buy-to-let investments):
- An additional 5% surcharge applies on top of the standard rates.
Upcoming Changes (Effective from 1 April 2025):
- The general SDLT threshold will revert to £125,000.
- For first-time buyers, the threshold will decrease to £300,000, with relief available up to £500,000.
These changes were announced in the Autumn Budget 2024 to address housing affordability and market dynamics.
Calculating SDLT:
SDLT is calculated on the portion of the property price that falls within each rate band. For example, if you purchase a property for £300,000 as a first-time buyer before 1 April 2025:
- The first £425,000 is taxed at 0%: £0
- The remaining £75,000 is taxed at 5%: £3,750
- Total SDLT payable: £3,750
For precise calculations, you can use the HM Revenue and Customs’ (HMRC) Stamp Duty Land Tax calculator.
Exemptions and Reliefs:
Certain transactions may qualify for SDLT reliefs or exemptions, such as:
- Transfers of property between spouses or civil partners
- Inherited properties
- Charitable purchases
For detailed information on reliefs and exemptions, refer to the UK government’s official guidance.
It’s important to stay informed about SDLT rates and thresholds, especially with the upcoming changes in April 2025, to accurately assess the tax implications of your property purchase.
