Stamp Duty Land Tax (SDLT) is set to change significantly from 1 April 2025, bringing higher tax costs for many residential property transactions. If you’re planning to buy or sell property, it’s essential to understand how these changes could affect you.
From April 2025, SDLT rates will revert to their pre-September 2022 levels, meaning buyers will pay more tax on most property purchases. Currently, no SDLT is payable on the first £250,000 of a property’s value, but this threshold will drop to £125,000. The portion from £125,001 to £250,000 will be taxed at 2%, while the next band, from £250,001 to £925,000, will be charged at 5%. Higher-value properties will also see increased rates, with 10% SDLT applied to the portion between £925,001 and £1.5 million, and 12% on anything above £1.5 million.
First-time buyers will be particularly affected by the upcoming changes. Currently, they pay no SDLT on properties up to £425,000 and benefit from a reduced rate of 5% on the portion between £425,001 and £625,000. From April 2025, however, the relief will only apply to properties valued at £300,000 or less, with 5% payable on the portion between £300,001 and £500,000. Crucially, no relief will be available for properties priced above £500,000. This means that first-time buyers purchasing homes worth between £500,000 and £625,000 could face up to £11,250 in additional SDLT.
These changes could significantly impact property transaction costs, particularly for first-time buyers and those purchasing higher-value homes. Seeking legal advice is advisable to ensure you understand your obligations and how best to navigate these changes.
For guidance on SDLT and property transactions, contact Frank Smith & Co Solicitors on 01242 801 748 or visit us at franksmithandco.com.