Significant changes to the UK’s Stamp Duty Land Tax (SDLT) are set to take effect on April 1, 2025.These adjustments will impact all property buyers, with notable implications for first-time buyers. Here’s a comprehensive overview to help you navigate these changes.
Current SDLT Structure (Until March 31, 2025):
General Buyers:
0% on the first £250,000
5% on the portion between £250,001 and £925,000
10% on the portion between £925,001 and £1.5 million
12% on any amount above £1.5 million
First-Time Buyers:
0% on properties up to £425,000
5% on the portion between £425,001 and £625,000
No relief on properties over £625,000
Upcoming Changes (Effective April 1, 2025):
General Buyers:
0% on the first £125,000
2% on the portion between £125,001 and £250,000
5% on the portion between £250,001 and £925,000
10% on the portion between £925,001 and £1.5 million
12% on any amount above £1.5 million
First-Time Buyers:
0% on properties up to £300,000
5% on the portion between £300,001 and £500,000
No relief on properties over £500,000
Impact on Buyers:
First-Time Buyers:
Example1: Purchasing a property at £350,000 before April 1, 2025, incurs no SDLT. After this date, the SDLT payable would be £2,500.
Example2: For a property priced at £550,000, no relief is currently available, resulting in an SDLT of £16,250. Post-April 1, 2025, the SDLT remains £16,250, but the lack of relief on properties over £500,000 means first-time buyers lose potential savings.
General Buyers:
Example: Purchasing a property at £300,000 before April 1, 2025, results in an SDLT of £2,500. After this date, the SDLT increases to £5,000 due to the reduced 0% threshold and introduction of the 2% band.
Strategic Considerations:
Accelerate Purchases: Completing property transactions before April 1, 2025, can result in substantial tax savings, especially for first-time buyers.
Financial Planning: Incorporate the upcoming SDLT changes into your budget to avoid unexpected costs.
Staying informed and proactive will help you navigate these changes effectively. For personalised advice, consider reaching out to Hoskin`s.
