As part of the autumn budget measures, it was announced that the higher rates of Stamp Duty Land Tax (SDLT) on purchases of additional residential properties will increase to 5% (from 3%) for transactions effective on or after 31 October 2024.
How does this affect residential property buyers?
The stamp duty land tax changes apply to individual purchases of additional residential property, such as buy-to-let properties and second homes in England and Northern Ireland. The higher rate does not usually apply to individuals who own one residential property, irrespective of the intended use. However, individuals might be required to pay higher rates even if they plan to live in the property they are purchasing and do not own another residential property. This is because the rules apply not just to the buyer, but also to anyone they are married to or purchasing the property jointly with. The measure also increases the single rate of SDLT payable by companies and other non-natural persons when buying residential properties worth more than £500,000, from 15% to 17%.
SDLT for first-time buyers
The previous government made temporary changes in September 2022 to various SDLT bands, reducing the amount of SDLT payable to many buyers. No SDLT is currently payable for first-time buyers purchasing up to £425,000 (£300,000 before 23 September 2022). The relief also applies to the first £425,000 (£300,000 before 23 September 2022) for purchases up to £625,000 (£500,000 before 23 September 2022). There is then SDLT at 5% on any portion of the price from £425,001 to £625,000.
No SDLT relief is available for first-time buyers spending more than £625,000 (£500,000 prior to 23 September 2022) on a property. No extension to these temporary changes was announced as part of the Budget measures, so these figures are now expected to revert back to the old limits on 31 March 2025 as planned.
SDLT zero rate band
In addition, the SDLT zero rate band
was increased from £125,000 to £250,000 on 23 September 2022, removing the 2% band for properties ranging from £125,000 to £250,000. These changes are also temporary and will revert back to the old limits on 31 March 2025.
Need Help Navigating the Latest Stamp Duty Land Tax (SDLT) Changes from the Autumn Budget? Contact Us Today!
The recent updates to Stamp Duty Land Tax (SDLT) in the Autumn Budget could significantly impact your property transactions. Whether buying, selling, or managing property investments, understanding the new SDLT rates and rules is essential to making informed financial decisions.
At Moore South, our property tax experts are here to guide you through these SDLT changes and help you optimize your investment strategy. Contact us today for a personalised consultation and ensure you’re fully prepared to navigate the implications of the latest Stamp Duty Land Tax policies.
Get in touch now, and let us simplify your property journey.