If you’re considering purchasing property or land in England or Northern Ireland, it’s crucial to stay informed about the upcoming Stamp Duty Land Tax (SDLT) revisions taking effect from 1 April 2025. These changes will phase out the temporary, higher thresholds introduced during the pandemic and return SDLT rates to their pre-Covid levels. Below, we outline the current system, highlight the forthcoming adjustments, and explain how they might affect you.
What is Stamp Duty Land Tax?
Stamp Duty Land Tax (SDLT) is a levy paid to HM Revenue & Customs (HMRC) when you buy or transfer property or land above a specified value in England or Northern Ireland. The exact amount varies based on:
- Property category: Residential, non-residential, or mixed-use.
- Reliefs or exemptions: For instance, First-Time Buyer Relief.
- Surcharges: Applying to additional homes, company-owned properties, or non-UK resident purchasers.
Current SDLT Structure Until 31 March 2025
Until the end of March 2025, residential property purchases follow these bands:
- 0% for the portion of the price up to £250,000
- 5% on any amount between £250,001 and £925,000
- 10% on any amount between £925,001 and £1,500,000
- 12% on any amount above £1,500,000
First-Time Buyers
- 0% on purchases up to £425,000
- 5% on the portion between £425,001 and £625,000
- No relief if the total cost exceeds £625,000
Additional Charges
Certain scenarios (e.g., buying a second home or investing as a non-UK resident) attract extra SDLT surcharges on top of the standard rates.
Reversion to Pre-Covid Thresholds on 1 April 2025
From 1 April 2025, the temporary SDLT thresholds introduced during the pandemic will end, and the lower, pre-Covid limits will be reinstated. This shift means buyers will face SDLT sooner, making it essential to plan carefully.
Key thresholds from April 2025 include:
- Residential Properties: SDLT applies from £125,000
- First-Time Buyers: SDLT relief available up to £300,000 (for properties costing £500,000 or less)
- Non-Residential Land and Properties: SDLT applies from £150,000
Below is a more detailed look at the rates for residential property transactions completing on or after 1 April 2025:
| Price Band | SDLT Rate |
| Up to £125,000 | 0% |
| £125,001–£250,000 | 2% |
| £250,001–£925,000 | 5% |
| £925,001–£1,500,000 | 10% |
| Over £1,500,000 | 12% |
First-Time Buyer Relief after 1 April 2025
- No SDLT on the first £300,000
- 5% on the portion between £300,001 and £500,000
- No relief for properties above £500,000 (standard rates apply)
Why Are the Thresholds Changing?
The elevated thresholds were initially introduced as a temporary measure to stimulate the housing market during a period of economic uncertainty. With the sector now showing signs of recovery, the government is reverting to the pre-Covid structure to reduce ongoing taxpayer support.
What Does This Mean for Buyers?
- Higher Upfront Costs
With the 0% threshold dropping to £125,000, more buyers will face SDLT obligations, potentially increasing the initial outlay for property purchases. - Ongoing First-Time Buyer Benefits
First-time buyers still enjoy relief up to £300,000 (for properties valued at £500,000 or less). However, if your purchase price exceeds £300,000, you’ll start paying SDLT sooner than under the current system. - Timing Your Purchase
If you’re in a position to finalise your transaction before 31 March 2025, you could benefit from the current thresholds. Yet each scenario is different, so professional advice is recommended before rushing any decision.
Need Further Guidance?
These forthcoming SDLT changes may significantly affect your home-buying plans. To ensure you fully understand the potential impact, consult HM Revenue & Customs guidance or talk to us. By staying informed and seeking expert support, you’ll be better prepared to navigate the evolving SDLT landscape and make informed decisions about your property investments.
This article is prepared by Sajjad Hussain, Solicitor, feel free to contact him at +44 207 242 1666