Autumn Budget 2024: The Hidden Impact of Stamp Duty Changes and What Was Left Unsaid

The most immediate news from the budget was that the higher rates for purchasing additional residential properties rose from 3% on top of the normal Stamp Duty Land Tax rates to 5%. This will not only affect buyers who are purchasing a second home or a buy to let but also companies who deal with residential properties. This came into force almost immediately on  31st October 2024 although transactions that had already exchanged prior to that date (save for some exclusions) will still pay the lower additional 3% rate. Clearly the short window to it’s introduction left little room to manoeuvre for many clients and there will be plenty of clients now facing a four or five figure increase should they complete their purchasers.

Whilst the above was the headline news, what wasn’t specifically mentioned was there was no extension to the increased SDLT thresholds brought in by the previous government. The clock is therefore very much ticking on this new SDLT deadline which is somewhat going under the radar.

Up to 31st March 2025 the rates for SDLT will be as follows:

·       No SDLT rate up to £250,000

·       5% on any amount between £250,001 and £925,000

·       10% on any amount between £925,001 to £1.5 million

·       12% for anything over £1.5 million

As it stands from 1st April 2025 we will see a return of the threshold to pay SDLT lowered to £125,000 and the return of the 2% rate:

·       No SDLT rate up to £125,000

·       2% on any amount between £125,001 and £250,000

·       5% on any amount between £250,001 and £925,000

·       10% on any amount between £925,001 to £1.5 million

·       12% for anything over £1.5 million

This March deadline also applies to first time buyers. At present a first-time buyer will pay no SDLT up to £425,000 and then 5% on any amount between £425,001 and £625,000. The relief doesn’t apply to any purchase costing more than £625,000.

From 1st April 2025 the first-time buyer relief will be lowered with no SDLT payable up to £300,000 and then 5% payable on any amount between £300,001 and £500,000. With no relief then available for any purchase costing more than £500,000. This will be a particular concern for those in certain areas of the country where average house prices are north of that half a million figure.

There is obviously still plenty of time but, particularly with complex transactions, you may find this deadline arrives sooner than think.

If you have any questions on SDLT concerns either regarding the increase in the additional properties SDLT rate or the April deadline then please reach out to our Residential Property team who would be pleased to assist you.