2024 was a year of changes. One you may not have noticed was the changes to Stamp Duty Land Tax (SDLT).
Currently, properties with a purchase price of £250,000 or less attract a 0% rate of SDLT, provided you do not own an additional property.
First time buyers also enjoy their own relief on SDLT, known as First Time Buyer’s Relief.
Currently, the rate is 0% for properties with a purchase price of up to £425,000 and a reduced rate of 5% on any remainder up to £625,000.
However, from April 1 2025, thresholds will change as follows:
- The 0% threshold reduces from £250,000 to £125,000, meaning properties with a purchase price of over £125,000 will now attract SDLT starting at a rate of 2%.
- First Time Buyer’s Relief also reduces. The 0% rate reduces from £425,000 to £300,000 and the 5% band also reduces from £425,001-£625,000 to £300,001-£500,000.
What does it mean?
If you were to purchase a new, main home, for £150,000 and completed the purchase on March 31 2025, you would benefit from the current 0% rate and would not pay SDLT.
Completing the same purchase on April 1 2025 would make you liable to pay SDLT at a rate of 2%, meaning a bill of roughly £500.
If you were purchasing your first home for £350,000, completing on March 31 2025, you would benefit from the current first-time buyer’s relief rate of 0%.
Completing the same purchase on April 1, would make you liable to pay SDLT at a rate of 5% meaning a bill of roughly £2,500.
What can you do?
Get organised!
Instructing your property lawyer early is one way to pre-empt any issues which may cause a delay.
There will be several factors which will dictate if you meet the deadline:
- Legal issues impacting the property
- Being part of a larger property chain
- The speed of the seller in progressing matters
With over 200 years of experience serving Cumbria, Bendles’ expert residential property lawyers are ready to support you as you buy your next home.
Bendles LLP does not provide tax advice. Should you have any specific tax queries, you should seek advice from a tax advisor.
