As you may have seen, the Government has announced that Stamp Duty Land Tax (SDLT) will increase on second homes and buy-to-let properties.
The official Government Autumn Budget Statement reads:
“The government is supporting first-time and main home buyers by increasing the Higher Rates for Additional Dwellings in Stamp Duty Land Tax on the purchases of second homes, buy-to-let residential properties, and companies purchasing residential property, from 3% to 5% from 31 October 2024. Those who exchanged contracts prior to 31 October 2024 are not affected by this rate increase.“
“This surcharge is also paid by non-UK residents purchasing additional property. The single rate of SDLT that is charged on the purchase of dwellings costing more than £500,000 by corporate bodies will also be increased by 2 percentage points from 15% to 17%.”
What does this mean for me?
If your property purchase is currently progressing with us, you don’t need to contact us. Your legal team will make the appropriate adjustments to your completion statement in due course, where changes are applicable to your transaction. We will prioritise those transactions that are due to complete imminently. Don’t worry if your initial quote from us shows an amount payable for stamp duty, this is only a guide and the actual amount payable will be calculated based on the rates at the time you reach completion.
If we have already completed our Source of Funds checks, we may need to complete additional checks to verify any additional funds required.
Higher rates for additional properties
You’ll usually have to pay the additional higher rate, on top of SDLT rates, if buying a new residential property means you’ll own more than one property upon completion.
You can view the Gov.uk SDLT calculator or check the higher rates to work out how much tax you’ll pay.
If you’re replacing your main residence
You will not pay the extra 5% SDLT if the property you’re buying is replacing your main residence and that has already been sold or the sale completes simultaneously with your purchase.
If you have not sold your main residence on the day you complete your new purchase, you’ll have to pay higher rates. This is because you own 2 properties, however, you can apply for a refund if you sell your previous main home within 36 months.
Thresholds from 1st April 2025
Proposed changes to SDLT rates from 1st April 2025 are still expected. SDLT will start to apply from £125,000 for residential properties instead of £250,000, and £300,000 for first-time buyers instead of £425,000. Full details can be found on Gov.uk/stamp-duty-land-tax.