Understanding Current Stamp Duty Land Tax (SDLT) on Residential and Additional Properties and the recent changes from the 2024 Autumn Budget
In the complex world of property transactions, one tax that every buyer must contend with is Stamp Duty Land Tax (SDLT). If you’ve recently bought or are considering purchasing a residential property in the UK, it’s important to understand how SDLT works, the rates you’ll pay, and how recent 2024 Autumn budget changes might affect you.
This post aims to break down the current SDLT rates, providing clarity on how much you’ll need to pay based on your property’s price, and how different types of buyers—first-time buyers, second homes, and buy-to-let investors—are impacted.
What is Stamp Duty Land Tax (SDLT)?
Stamp Duty Land Tax is a tax applied to the purchase of property or land in England and Northern Ireland. The amount you pay depends on the price of the property and the type of buyer you are.
In its most basic form, SDLT is calculated as a percentage of the property's purchase price. The more expensive the property, the higher the tax due. The rates, however, vary depending on the value of the property, and additional surcharges can apply under certain circumstances (like purchasing a second home or buy-to-let property).
The Current Stamp Duty Land Tax SDLT Rates for UK Properties
Rates up to 31 March 2025
Property or lease premium or transfer value | Standard Rate (Residential) | Non UK Resident |
Up to £250,000 (£425,000 for first-time buyers) | Zero | +2% |
The next £675,000 (the portion from £250,001 to £925,000) | 5% | +2% |
The next £575,000 (the portion from £925,001 to £1.5 million) | 10% | +2% |
The remaining amount (the portion above £1.5 million) | 12% | +2% |
Rates from 1 April 2025
Property or lease premium or transfer value | Standard Rate (Residential) | Non UK Resident |
Up to £125,000 (£300,000 for first-time buyers-property value cannot exceed £500,000) | Zero | +2% |
The next £125,000 (the portion from £125,001 to £250,000) | 2% | +2% |
The next £675,000 (the portion from £250,001 to £925,000) | 5% | +2% |
The next £575,000 (the portion from £925,001 to £1.5 million) | 10% | +2% |
The remaining amount (the portion above £1.5 million) | 12% | +2% |
Stamp Duty for non-residents
If you’re a non-UK resident buying a residential property in England or Northern Ireland, you might have to pay an additional 2% on top of the existing Stamp Duty rates. This applies to properties costing more than £40,000.
First-Time Buyers' Relief
One of the most beneficial aspects of SDLT, for those entering the property market for the first time is the First-Time Buyers’ Relief. If you’re a first-time buyer purchasing a home for £500,000 or less, you will not pay SDLT on the first £425,000. The relief means:
Up to £425,000: No SDLT.
£425,001 to £500,000: 5% SDLT on the portion over £425,001 which would be 5% on the remaining £75,000 . Total SDLT = £3,750
Please keep in mind that starting 1 April 2025, the rates are changing to the following:
You’ll pay:
no SDLT up to £300,000
5% SDLT on the portion from £300,001 to £500,000.
If the price is over £500,000, you cannot claim the relief.
Example
You are a first-time buyer and purchase a property for £500,000. The SDLT you owe will be calculated as:
0% on the first £300,000 = £0
5% on the remaining £200,000 = £10,000
total SDLT = £10,000
A Word on High-Value Properties
Properties over £1.5 million are subject to the highest tax rate, 12%. This means that, for luxury homes, the SDLT burden quickly becomes substantial. For example, purchasing a £2 million property would result in an SDLT payment of £151,250.
You’ll pay:
0% on the first £250,000
5% on the portion from £250,000 to £925,000: £33,750
10% on the portion of £925,000 to £1,500,000: £57,500
12% on the portion of £1,500,000-£2,000,000: £60,000
Higher rates for Additional Properties (Buy to Lets or Second Properties)
You’ll usually have to pay 5% on top of SDLT rates if buying a second property (meaning you own more than one).
Use the SDLT calculator or check the higher rates to work out how much tax you’ll pay.
Rates up to 31 March 2025
Property or lease premium or transfer value | Buy to Let/ Additional Property | Non UK Resident |
Up to £250,000 (£425,000 for first-time buyers) | 5% | +2% |
The next £675,000 (the portion from £250,001 to £925,000) | 10% | +2% |
The next £575,000 (the portion from £925,001 to £1.5 million) | 15% | +2% |
The remaining amount (the portion above £1.5 million) | 17% | +2% |
Rates from 1 April 2025
Property or lease premium or transfer value | Standard Rate (Residential) | Non UK Resident |
Up to £125,000 (£300,000 for first-time buyers-property value cannot exceed £500,000) | 5% | +2% |
The next £125,000 (the portion from £125,001 to £250,000) | 7% | +2% |
The next £675,000 (the portion from £250,001 to £925,000) | 10% | +2% |
The next £575,000 (the portion from £925,001 to £1.5 million) | 15% | +2% |
The remaining amount (the portion above £1.5 million) | 17% | +2% |
When is SDLT Payable?
SDLT must be paid within 14 days of completing the property transaction, and the buyer is responsible for filing the SDLT return. Failure to do so within this time frame could result in penalties or interest on the amount owed.
How to Calculate Your SDLT
To help property buyers calculate the SDLT due on a transaction, there are several online tools and calculators available. It's always a good idea to double-check with a solicitor or conveyancer who can ensure your SDLT is calculated accurately, especially when dealing with more complex transactions such as second homes, shared ownership schemes, or properties purchased with multiple buyers.
Understanding SDLT Is Key to Making Informed Property Decisions
When buying property, understanding SDLT is crucial for making informed financial decisions. Whether you're a first-time buyer benefiting from relief, or an investor facing additional surcharges, knowing how the rates apply to your specific situation can save you money and avoid unnecessary surprises. Always ensure you're clear on the SDLT rates and any potential changes that may arise.
As the property market continues to evolve, so too will the rules surrounding property taxes. Staying informed and prepared is the key to navigating the complexities of Stamp Duty Land Tax.
WANT TO LEARN MORE ABOUT STAMP DUTY?
Get in touch today.
Cedar Crest Ltd – telephone UK T: +44 (0) 203 883 1017,
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– email info@cedar-crest.co.uk
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