What is SDLT?

Stamp Duty Land Tax (SDLT) is a tax levied on property purchases in England and Northern Ireland. It applies to residential property transactions exceeding specific thresholds, with rates calculated in tiers based on the property’s price.

Key changes effective April 1, 2025:

Reduction of the nil-rate band:

• Current Threshold: No SDLT on the first £250,000 for home movers.
• New Threshold: From April 1, 2025, the 0% threshold will decrease to £125,000.

Introduction of a 2% rate band:

• A new 2% SDLT rate will apply to the portion of the property’s price between £125,001 and £250,000.

Increase in surcharge for additional properties:

• The SDLT surcharge on second homes and buy-to-let properties increased from 3% to 5% on October 31, 2024.

For example:

How SDLT affects a £295,000 property – today and from April 1, 2025:

CURRENT SDLT

(until March 31, 2025)

For a home priced at £295,000, the calculation is:

• 0% on the first £250,000 = £0
• 5% on the portion above £250,000 (£45,000) = £2,250

Total SDLT Today = £2,250

 

NEW SDLT

(from April 1, 2025)

Under the new rules, the SDLT will increase due to the reduced 0% threshold and introduction of the 2% rate. For a £295,000 property:

• 0% on the first £125,000 = £0
• 2% on the portion from £125,001 to £250,000 (£125,000) = £2,500
• 5% on the portion above £250,000 (£45,000) = £2,250

Total SDLT from April 2025 = £4,750

What this means for home movers

For a property priced at £295,000, SDLT will increase from £2,250 to £4,750 after April 1, 2025—a difference of £2,500. This change introduces a significant additional cost for home movers purchasing properties above £250,000.

If you’re considering moving, completing your purchase before the new rules take effect could result in substantial savings. Acting promptly can also help you avoid the anticipated increase in market activity as the deadline approaches.

For personalised advice, consult a property expert or use an SDLT calculator to understand how these changes may impact your specific situation.