On 1st April 2025, the Stamp Duty Land Tax (SDLT) rates are changing. B P Collins’ property team explores the changes and how they might affect you if the transaction completes after this date.
SDLT is a tax which applies to all transfers of property for consideration above a certain threshold.
There are a number of factors which can affect the level of SDLT payable. For example, whether or not you are a first-time buyer; purchasing as an individual or company; purchasing additional property or whether or not you are a UK resident amongst others.
From 1st April, the nil rate threshold (the level above which SDLT becomes payable) will return to the previous level of £125,000 from its current level of £250,000. A 2% rate between £125,001 and £250,000 has also been introduced, marginally increasing the cost to buyers.
The SDLT changes particularly affect first-time buyers, for whom the nil rate threshold will return to £300,000 from its current level of £425,000. Not only this, but the maximum purchase price for which First Time Buyers Relief can be claimed will reduce to £500,000 from its current level of £625,000. This will significantly reduce the number of buyers who are eligible for this relief.
As a result of these changes, first time buyers could be liable for an additional £6,250. Non first-time buyers could also be liable for additional SDLT, being a maximum of £2,500.
It is estimated that come April, only one in ten properties will benefit from a stamp duty free purchase, in comparison with a third in the current market.
Regardless of these changes, it is important to note that the deadline for paying SDLT remains the same – 14 days of the date of completion of a transaction (or substantial performance of contract).
I want to buy a property, what can I do?
1. Do the Maths
The Government provides a SDLT calculator which will enable you to calculate how much SDLT you will be liable to pay if your transaction completes after the 1st of April. It’s important to remember that there are other factors to consider when purchasing a property: for example, interest rates, and local market trends.
You can find the link here: Stamp Duty Land Tax Calculator
2. Act now
There are significant savings to be made by completing your transaction prior to the SDLT changes.
If you have already made an offer on a property, you can try to complete the purchase before the SDLT thresholds change. However, you need to bear in mind that the average transaction time for a freehold purchase is approximately eight to ten weeks.
Instruct a proactive solicitor and ensure that the deadline is communicated throughout any chain. It is important, however, not to cut any corners with your purchase. Your solicitor will still need to undertake thorough due diligence to ensure that there are no problems with the property in future.
3. Get Professional Advice
B P Collins works with a range of specialist tax advisers who can assist in these matters, providing guidance on any exemptions or reliefs that may be applicable to your individual circumstances. Financial advisers can also help you understand how the changes to SDLT rates interact with your broader financial position. They can provide assistance on securing the best possible mortgage rates and the best financial outcome long term.
If you require advice or guidance regarding the purchase of property, please contact the residential property team at B P Collins by emailing us at enquiries@bpcollins.co.uk or calling 01753 889995.
