The countdown is on – Changes to SDLT from 1 April 2025

From 1 April 2025 the SDLT nil-rate band will decrease ending the temporary cut to rates. Buyers looking to benefit from the current SDLT rates will need to complete their purchases on or before 31 March 2025. It is not enough to exchange contracts before 1 April, or even to pay all the purchase money in advance, since the increased rates will still apply on completion.

What is SDLT?

Stamp Duty Land Tax (SDLT) is a tax payable on completion of the purchase of a property or land in England. The SDLT is calculated as a percentage of the purchase price with different rates applying to different bands of the purchase price.

The SDLT payable should be taken into consideration when you are looking to buy a property.

Higher rates of SDLT are payable if you are purchasing an additional property or if you are a Non-UK resident for SDLT purposes.

Why are SDLT rates changing?

In September 2022 the government announced a cut to SDLT rates to support the housing market. It temporarily increased the threshold before you became liable to pay SDLT.

This has meant that no SDLT was payable on the first £250,000 of the purchase price.

First-time buyers are currently exempt from paying SDLT on homes priced up to £425,000, with the relief applicable on properties with a purchase price up to £625,000.

What are the changes on 1 April 2025?

From 1 April the nil-rate band will be reduced from £250,000 to £125,000 increasing the SDLT payable, as per the table below:

For first time buyers this will mean the nil-rate threshold will drop to £300,000 from £425,000, and the cap on qualifying properties will be lowered to £500,000.

What does this mean for me as a buyer?

In practice the change will mean that someone eligible to claim first time buyer relief who completes a purchase of a £500,000 property from 1 April 2025 will pay SDLT of £10,000 instead of £3,750.

Someone subject to the higher rate of SDLT for an additional property who completes a purchase of a £500,000 property from 1 April 2025 will pay SDLT of £40,000 instead of £37,500.

Please see below table for more examples:

If a buyer is a non-resident for SDLT purposes, then they will also have to pay the additional 2% surcharge. See below table for examples:

What should you do now?

If you have an ongoing transaction which has not yet exchanged please contact your conveyancer. If the transaction may go beyond 31 March 2025 and you are buying you may want to check what your SDLT will be. If you are selling you may want to ensure your buyer is aware of the change to know if they need the matter to complete before 31 March 2025 or have sufficient funds to cover the increased SDLT.

If you are looking to buy a property but have not yet had an offer accepted on a property it may be too late to complete before the 31 March deadline. I would again suggest speaking with a conveyancer to determine what your SDLT liability will be on the new rates so you can factor this into your planning.

If you do not yet have a conveyancer and would like to discuss the conveyancing process or the SDLT change we would be happy to assist. You may also find our article ‘choosing a conveyancing solicitor‘ useful.