From 1 April 2025, the Stand Duty Land Tax (SDLT) Rules are changing and we would like to ensure our clients are aware of the new rates and the likely increase in tax payable.
The current rates (resulting in you owning one property and not being a first time buyer) are:
Property or lease premium or transfer value SDLT rate
Up to £250,000 Zero
£250,001 to £925,000 5%
£925,001 to £1.5 million 10%
Above £1.5 million 12%
In April the rates are changing to:
Property or lease premium or transfer value SDLT rate
Up to £125,000 Zero
£125,001 to £250,000 2%
£250,001 to £925,000 5%
£925,001 to £1.5 million 10%
Above £1.5 million 12%
Therefore, if you were to purchase a £250,000 house before 1 April, you would not be liable to pay SDLT as you fall within the zero-rate threshold. If you purchase said property in April after the SDLT has changed you would pay £2,500.
If you are a first-time buyer, you will still be entitled to claim first time buyer’s relief, however, the thresholds are changing. Before 1 April you would pay no SDLT up to £425,000 and then 5% SDLT from £425,000 to £625,000. If you are purchasing for more than £625,000 you would not be entitled to claim relief. If you purchase a property after 1 April, no SDLT is payable up to £300,000, and then 5% SDLT up to £500,000. If you are purchasing over £500,000 you will no longer be able to claim relief and will have to calculate your SDLT from the standard rates.
If you are unsure of how much SDLT you are entitled to pay please do liaise with your financial advisor or broker, who will be able to assess this for you. Alternatively, you may use the SDLT calculator on the government website: https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#!/intro
The deadline is quickly approaching and, unfortunately, if you have not yet started your purchase transaction, it is unlikely that you will complete before 1 April 2025. If your transaction is already underway and we have received your searches, we will try our best to complete this before 1 April 2025, but we cannot make any guarantees as this timescale does depend on all parties in the chain being able to meet these dates.
We do suggest all clients budget for the new SDLT rate now, to ensure that, should their purchase transaction complete after 31 March 2025, they have all the funds needed to complete their transaction.
If you have any questions or wish to discuss selling or buying a property, please do get in touch with one of our experienced team members who would be pleased to assist you.
Cullompton 01884 33818
Exeter 01392 285000