What do I Need to Know about the Changes to Stamp Duty Land Tax?

As experts in property transactions and services, RDC always strive to keep our clients informed about important changes in the legal landscape that may impact their property transactions. One such significant change in recent years has been the various alterations to Stamp Duty Land Tax (SDLT) rules. In this article, we’ll break down the latest updates to SDLT and explain exactly what you need to know to navigate the complex world of property taxation.

Background on SDLT

If you buy property, or land, in England or Northern Ireland valued over a certain amount (the threshold), then Stamp Duty Land Tax is payable to HMRC within 14 days of the purchase completing. Similar taxes also exist in Scotland (Land and Buildings Transactions Tax) and Wales (Land Transaction Tax). It was originally introduced in December 2003 to replace the old Stamp Duty system, which taxed property transactions at a fixed rate based on the purchase price. Under the current SDLT system, the amount of tax you pay depends on the property's purchase price and your specific circumstances, such as whether you are a first-time buyer or purchasing an additional property.

Changes to Stamp Duty Land Tax

On 23 September 2022, the then Chancellor Kwasi Kwarteng announced permanent reforms to SDLT among a number of taxation changes as part of the Truss Government’s “Growth Plan”. However, in the autumn statement on 17 November 2022, the Government announced that the Stamp Duty cuts introduced by the previous Government in September would not be permanent. Chancellor Jeremy Hunt said that he will “sunset the measure” from 31 March 2025, when SDLT rates will return to their previous levels.

• The SDLT nil-rate threshold (at which property buyers in England and Northern Ireland begin to pay SDLT) is currently £250,000. From 31 March 2025 this will return to the previous level of £125,000, which was in place prior to 23 September 2022.
• The nil-rate threshold for first-time buyers (at which first time buyers in England and Northern Ireland begin to pay SDLT), is currently £425,000, but from from 31 March 2025 will return to its previous level of £300,000.
• The maximum purchase price for which First Time Buyers’ Relief can be claimed will revert back to £500,000 from 31 March 2025 from the current level of £625,000.

* For complex SDLT matters we would always advise that you consult your tax advisor or accountant.

How Will the Changes to SDLT Affect You?

Bear in mind that the changes announced in the autumn statement will not take effect until 31 March 2025. The current SDLT rates, as introduced by the previous government, will continue to apply until that time. It’s also worth bearing in mind that a lot can change in just under 2 years, so there may well be further changes. If the changes proposed for 2025 do proceed as planned, the market and those involved in the sector also have plenty of time to prepare.

Getting Help and Advice from a Solicitor

A solicitor will be able to file your Stamp Duty Land Tax return and arrange payment of the tax on the day that a land or property purchase completes. They will also claim any relief you are eligible for. There are also certain situations where you do not need to send a return and your solicitor will also be able to advise of these.

Please note that you may be charged penalties and interest if you do not file your Stamp Duty Land Tax return and make your payment within 14 days of the land and property purchase completion.

As experts in property and conveyancing, we can help your property purchase go smoothly and efficiently and ensure SDLT is paid at the correct rate and on time. If you’re looking to purchase a property, call RDC Solicitors today on Bradford 01274 735 511, Bingley 01274 723 858 or Ilkley 01943 601173.