Stamp Duty Land Tax (SDLT) is a key part of the property purchasing process in the UK. For many buyers, it can be a significant cost to factor in when buying a property. Recent changes to SDLT have made headlines, and new requirements were rolled out on 1st April 2025.
What is SDLT?
Stamp Duty Land Tax, often referred to as just Stamp Duty, is a tax levied on the purchase price of property or land in England, Wales, and Northern Ireland. The amount of Stamp Duty owed is based on the value of the property or land being purchased. The tax is paid by the buyer, and the amount depends on whether the property is residential or non-residential, as well as the buyer’s status, for example a first-time buyer or a buy-to-let investor.
What are the Stamp Duty Land Tax Changes?
The new Stamp Duty rules and thresholds were introduced on 1st April 2025 and they are as follow:
1. First Time Buyer Relief:
What is the First-Time Buyer Stamp Duty Relief?
For first-time buyers, the Stamp Duty Land Tax threshold has been raised. If you are a first-time buyer purchasing a property for less than £500,000, you may be eligible for relief. You won’t pay Stamp Duty on properties valued up to £300,000. For properties priced between £300,001 and £500,000, a reduced rate of 5% will apply on the portion of the price above £300,000. However, first-time buyer relief is not available for properties over £500,000. It’s important to note also that you will not qualify for the First Time Buyers Relief if you purchase a property jointly with someone who is not a first time buyer.
2. Buy-To-Let Properties:
Is Stamp Duty payable on Buy-to-Let Properties?
Prior to the 1st April 2025 changes to SDLT, individuals purchasing buy-to-let properties or second homes faced a 3% surcharge on top of the standard SDLT rates. While this surcharge remains, there have been adjustments to the thresholds at which the different SDLT rates apply meaning more Stamp Duty will now be payable. The new thresholds are as follows:
Stamp Duty Thresholds for Residential Properties:
- Up to £125,000: No Stamp Duty payable
- Between £125,001 to £250,000: 2%
- Between £250,001 to £925,000: 5%
- Between £925,001 to £1,500,000: 10%
- Above £1,500,000: 12%
Stamp Duty Thresholds for First-Time Buyers:
- Up to £300,000: 0%
- £300,001 to £500,000: 5%
- £500,001: No relief available
Therefore, for a buy-to-let purchase or a purchase that is a second home, the above rates apply plus the additional 3% surcharge.
3. Non-UK Residents:
What is the Stamp Duty surcharge for Non-UK Residents?
The government has introduced additional measures for non-UK residents who purchase a property in England and Northern Ireland. There will now be a 2% surcharge on properties purchased by individuals who are non-UK residents.
4. Higher-Value Properties:
What are the Higher Rates of Stamp Duty for Higher-Value Properties?
Another significant change that has taken place is the increase in SDLT rates for more expensive properties. For properties priced over £1.5 million, the tax rate on the portion above £1.5 million is now set at 12%.
Blog: What to Expect in the Initial Stages of a Conveyancing Transaction
There are many steps involved in the initial stage (which we often call the initial instructions) of conveyancing. Here we attempt to break them down into easy-to-understand and digestible steps.
A blog by Jemima Abbey-Smith
How Do the New Stamp Duty Rates Affect Buyers?
The new rates which came into effect on 1st April 2025 see an increase in the amount of Stamp Duty payable. The new rates are:
Stamp Duty Thresholds for Residential Properties:
- Up to £125,000: No Stamp Duty payable
- Between £125,001 to £250,000: 2%
- Between £250,001 to £925,000: 5%
- Between £925,001 to £1,500,000: 10%
- Above £1,500,000: 12%
Stamp Duty Thresholds for First-Time Buyers:
- Up to £300,000: 0%
- £300,001 to £500,000: 5%
- £500,001: No relief available
The amount of Stamp Duty owed (also known as Stamp Duty Land Tax) is determined by the purchase price of the property or land. These thresholds can change so it’s advisable to discuss your specific situation with a conveyancing solicitor who will provide you with the most up-do-date information. The latest Stamp Duty Thresholds are available on www.gov.uk.
You are considered a first-time buyer if you are purchasing a property that will be your only or main residence, and you have never owned a freehold or have a leasehold interest in a residential property in the UK or abroad. Note also that if you’ve ever inherited a property (or part of one), you won’t be considered a first-time buyer.
To pay the Stamp Duty owed you will need to complete a Stamp Duty Land Tax (SDLT) Return and pay the required amount of SDLT due. You must submit the return and pay the tax within 14 days of completion otherwise HMRC might charge you penalties and interest. Usually your conveyancing solicitor will complete this on your behalf. Your conveyancing solicitor will be able to complete this online however if you are doing tis yourself as an individual then you will be required to complete and submit a paper form.
The New Stamp Duty Land Tax Thresholds: In summary
As a buyer, it’s essential to stay up to date with these changes and understand how they affect your purchasing power. Inevitably, purchasers will now be required to pay more for their SDLT liability. By working with the right professionals such as the Thornton Jones Solicitors conveyancing team in your property purchase and planning ahead, you can navigate the Stamp Duty landscape smoothly and ensure your property transaction is as cost-effective as possible.
Find out more about how we can help you with your conveyancing, including calculating your Stamp Duty liability, by calling our team at any of our offices or, for a no-obligation conveyancing quote use our online conveyancing quote tool.
The content of this blog post is for information only and does not constitute formal legal advice and should not be relied upon as advice. Thornton Jones Solicitors Limited accepts no liability for any such reliance upon this content. Where the post includes links to external websites, Thornton Jones Solicitors Limited accepts no responsibility for the content of such sites. Any link to a third-party website should not be construed as endorsement by Thornton Jones Solicitors Limited of any content, products or services which are outside our direct
