You must pay Stamp Duty Land Tax (SDLT) if you buy a property, or land, over a certain price in England. The tax payable in Scotland, Ireland and Wales differs depending on the jurisdiction.
As of the 1st April 2025, the thresholds where Stamp Duty Land Tax is payable have been reduced. How much Stamp Duty Land Tax you pay will differ depending on whether the land or property you are purchasing will be used as residential property, non-residential or mixed-use.
If you are purchasing a residential property there are different rates of Stamp Duty Land Tax applicable if you are a First Time Buyer, purchasing at higher rates or are not considered to be a UK-resident for Stamp Duty purposes.
First – Time Buyers Relief
First-Time Buyers in England can benefit from relief from Stamp Duty Land Tax (SDLT) if the property you are purchasing is your first home. This is known as “First Time Buyer’s Relief”.
As of the 1st April 2025, the relief means that First-Time Buyers will pay no SDLT where the purchase price is £300,000 or less and 5% SDLT on the portion from £300,001 to £500,000. First-time buyer relief is not available on properties with a purchase price of £500,001 or more.
In order to qualify for relief, you must meet the following criteria:-
- You and anyone else you are buying with must be first-time buyers;
- The property must be used as your main residence;
- You or anyone else that you are buying the property with must not have had a legal interest in any other property anywhere else in the world – this includes inherited properties.
Standard Rates
“Standard Rates” of Stamp Duty Land Tax are payable if you are not a First-Time Buyer i.e. you have owned property previously and, on completion of your purchase, it will be the only residential property you own.
As of 1st April 2025, Stamp Duty Land Tax will not be payable on the first £125,000 of the property value. 2% will be payable on the portion from £125,001 to £250,000 and 5% will be payable on the next £675,000 (i.e. the portion from £250,001 to £925,000).
For properties valued over £925,000, 10% will be payable on the next £575,000 (i.e. the proportion from £925,001 to £1.5million) and finally, any amount above £1.5million will be payable at 12%.
Higher Rates
As of October 2024, you will usually pay 5% on top of “Standard Rate” Stamp Duty Land Tax if you purchase a new residential property resulting in you owning more than one property.
If you are replacing your main residence, then the higher rates would not be expected to apply if:
- the property you are purchasing will replace your current main residence.
- or you previously sold your main residence within 36 months of completing the purchase of your new main residence.
However, if on completion of your purchase, you have not sold your “main residence”, your purchase may be liable to higher rates of Stamp Duty Land Tax. This means that you will pay the 5% surcharge in addition to any other rates for SDLT that apply.
Non-UK Resident
It is important to note that, non-UK Residents may also be subject to an additional 2% surcharge if you purchase a residential property in England. If you are not present in the UK for at least (183 days) 6 months during the 12 months proceeding the completion of your purchase, you are not considered to be a “UK-Resident” for Stamp Duty Land Tax purposes.
If you must pay the surcharge, you will also need to pay any other rates for SDLT that apply, for example, if you already own a property and are purchasing an additional property.
How can we help?
Each transaction is unique and whether you are a First-Time Buyer, moving from your current main residence to a new property, or a seasoned investor, you are likely to be affected by the new Stamp Duty Land Tax (SDLT) Rates being introduced by the Government as of 1st April 2025.
If you are looking to start the process of purchasing a property, our Residential Conveyancing team would be delighted to speak with you and guide you through your transaction.
