Changes to Stamp Duty Land Tax 

Stamp Duty Land Tax (SDLT) is a tax you pay when buying property or land in England and Northern Ireland. Temporary SDLT changes introduced in 2022, including raising the tax threshold, are set to end on March 31, 2025. This blog explains how these changes could affect you, especially if you’re an investor or first-time buyer.

What are the changes?

From April 1, 2025, the stamp duty threshold reverts to £125,000. This means SDLT will be payable on any property purchase above this amount. The tax rate depends on the property's purchase price. Here's a table outlining the changes. 

What does this mean for me?

If you plan to buy a property after March 31, 2025, you might pay more SDLT than under the temporary rules. Let’s look at specific scenarios:

For First-Time Buyers:

Currently, first-time buyers in England and Northern Ireland pay no SDLT on the first £425,000 of a property purchase, provided the property costs £625,000 or less. From April 1, 2025, this relief will change. First-time buyers will pay no SDLT on the first £250,000, with a maximum property value of £625,000.

Key takeaway: First-time buyers purchasing properties above £250,000 will be significantly impacted, potentially facing a larger SDLT bill. Those buying under £250,000 will remain unaffected.

For Investors:

Investors purchasing additional properties already pay a 3% surcharge on each SDLT band. This surcharge will remain in place after the changes. However, with the threshold reverting to £125,000, investors will start paying this surcharge on a larger portion of their purchase price.

Key takeaway: The changes will likely increase the upfront costs for property investors, making smaller investments potentially less attractive and impacting overall investment strategies. Investors may want to consider completing purchases before the deadline to avoid these extra costs. 

What can I do? 

  • If possible, complete your property purchase before March 31, 2025. 
  • If you're a first-time buyer, carefully assess your budget and consider the changing relief.
  • Investors should review their investment strategies in light of the increased costs.
  • Use the SDLT calculator on the government's website to estimate your tax liability.

Other important things to note:

These changes apply to England and Northern Ireland only. Scotland and Wales have their own Land Transaction Tax and Land Transaction Tax, respectively. Other reliefs, such as Multiple Dwellings Relief and Disabled Person's Relief, are available.

Where can I find more information?

We hope this blog has been helpful, but you can find more information at Stamp Duty Land Tax. If you would like to discuss anything, you can get in touch with one of our property experts.

Here are some properties we have listed for sale that you will save money on if you complete before the Stamp Duty changes come into effect,