Please note that this News item is not maintained, and reflects the law as at the date of publication or update.
Increase to SDLT for purchases of second homes and company purchases of residential property
The eagerly awaited 2024 Autumn Budget announced significant changes to the Stamp Duty Land Tax (SDLT) payable by individuals and companies on completion of a purchase of a residential property. The new measures were brought in on 31 October 2024 and affect all residential property transactions that had not exchanged prior to this date.
The increases to SDLT are expected to disincentivise acquisitions of second homes and buy to let properties.
Essentially, there are two groups affected by the new rules. The first is individuals purchasing additional residential property such as second homes or buy to let properties and the second is companies and other non-natural persons purchasing residential property.
The higher rates of SDLT (on purchases of additional residential properties by individuals and the purchase of residential properties by companies) increase from 3% to 5% above the standard rates.
Additional measures also increase the single rate of SDLT payable by companies and other non-natural persons when purchasing residential properties worth more than £500,000 – from 15% to 17%.
For the transactions noted above the following SDLT rates are affective between 31 October 2024 and 31 March 2025:
| Relevant Consideration | Percentage of SDLT on consideration |
| Up to £250,000 | 5% |
| Over £250,000 – £925,000 | 10% |
| Over £925,000 – £1,500,000 | 15% |
| The remainder | 17% |
Companies purchasing residential property should also be aware that if they purchase a property with a consideration of over £500,000 there will be a single standard SDLT rate of 17% payable on the total consideration.
Removal of SDLT temporary relief for residential properties
From 1 April 2025 there will be further changes as the Government removes the temporary relief from rates of SDLT.
The relief was introduced in September 2022 with the effect that the threshold of consideration before SDLT became payable was increased from £125,000 to £250,000.
From the 1 April 2025 this relief will be removed and new rates will be payable for all purchasers – whether individuals or companies.
All transactions exchanging after 1 April 2025 will be subject to the following rates:
| Relevant Consideration | Percentage of SDLT on consideration | |
| Standard SDLT rates | Higher Rate if purchase is second property or purchase by a company | |
| Up to £125,000 | 0% | 5% |
| Over £125,000 – £250,000 | 2% | 7% |
| Over £250,000 – £925,000 | 5% | 10% |
| Over £925,000 – £1,500,000 | 10% | 15% |
| The remainder | 12% | 17% |
Changes to First Time Buyer Relief
In order for the first time buyers’ relief to apply to the purchase of a property it is a requirement that none of the purchasers have had a legal or beneficial interest in a property previously.
If this condition is satisfied and the relief is claimed, then up to the 31 March 2025 the following applies:
- no SDLT payable on the first £425,000
- 5% SDLT on the portion from £425,001 to £625,000
If the consideration is over £625,000 then the relief cannot be claimed and the standard rate of SDTL will be payable.
From 1 April 2025 the relief will change, and the following rates apply:
- no SDLT payable on the first £300,000
- 5% SDLT on the portion from £300,001 to £500,000
If the consideration is over £500,000 then the relief cannot be claimed and the standard rate of SDLT will be payable.
As with any tax liability it is imperative that SDLT is assessed and that returns and payments are submitted correctly. At Gaby Hardwicke, our Residential Property team is ready to guide you through the changes to stamp duty land tax, helping you make well-informed decisions.
