Significant Changes to Stamp Duty Land Tax (SDLT) in England and Wales
The autumn budget of 2024 has brought about notable changes to Stamp Duty Land Tax (SDLT) in England and Wales, impacting both rates and thresholds. These adjustments, aimed at reshaping property taxation, are being implemented across two key dates: 31 October 2024 and 1 April 2025.
Changes Effective from 31 October 2024
The first set of changes, which took effect on 31 October 2024, saw an increase in SDLT rates for additional properties and corporate purchases. For individuals purchasing additional residential properties, such as second homes or buy-to-let investments, the SDLT surcharge rose from 3% to 5% above the standard residential rates. Similarly, for companies and other non-natural persons acquiring residential properties valued at over £500,000, the SDLT rate increased from 15% to 17%. These measures are expected to significantly impact the cost of such transactions, particularly for investors and corporate entities.
Changes Effective from 1 April 2025
From 1 April 2025, further changes will be introduced, primarily involving the reversion of SDLT thresholds. The nil-rate threshold for standard residential properties will decrease from £250,000 to £125,000, meaning the 0% SDLT rate will apply only to properties valued at or below £125,000. This adjustment marks a return to the pre-September 2022 levels and is likely to affect a broad range of homebuyers.
Additionally, first-time buyers will see reductions in the relief available to them. From 1 April 2025, the relief threshold will fall from £425,000 to £300,000. Moreover, the maximum property value eligible for any first-time buyer relief will decrease from £625,000 to £500,000. These changes are expected to alter the affordability landscape for those entering the property market for the first time.
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