Standard Residential Purchases
Nil-Rate Threshold Reduction: The tax-free threshold has decreased from £250,000 to £125,000. This means properties priced above £125,000 are now subject to SDLT
First-Time Buyers:
Relief Threshold Adjustment: The maximum property value eligible for first-time buyer relief has been lowered from £625,000 to £500,000
Nil-Rate Band Reduction: The portion of the property price exempt from SDLT has decreased from £425,000 to £300,000. Purchases above £300,000 now incur a 5% SDLT rate on the amount between £300,001 and £500,000.
Additional Property Purchases:
Higher Rates Apply: Purchasers of additional properties, such as second homes or buy-to-let investments, continue to pay higher SDLT rates, including a 3% surcharge on top of standard rates.
Revised SDLT Structure
Up to £125,000: 0%
£125,001 to £250,000: 2%
£250,001 to £925,000: 5%
£925,001 to £1.5 million: 10%
Above £1.5 million: 12%
Note: An additional 3% applies to each band for purchases of additional properties
Impact on home buyers
These adjustments mean that many buyers will face higher SDLT liabilities. For example, a first-time buyer purchasing a £400,000 property will now pay £5,000 in SDLT, whereas previously, this would have been exempt.
Planning your property purchase
These adjustments mean that many buyers will face higher SDLT liabilities. For example, a first-time buyer purchasing a £400,000 property will now pay £5,000 in SDLT, whereas previously, this would have been exempt.
Given these changes, it’s advisable to:
Budget Accordingly: Factor in the increased SDLT when planning your finances.
Seek Professional Advice: Consult with a conveyancer or tax advisor to understand your specific obligations.
Utilise SDLT Calculators: Online tools can help estimate the SDLT payable on your intended purchase