Budget 2024 – Stamp Duty changes

Budget 2024 – Stamp Duty changes

The ‘temporary’ cut to Stamp Duty Land Tax (SDLT) will end on 31 March 2025 which will lower the property limit for first-time buyers to qualify for stamp duty reduction.

The temporary discounts were introduced originally in the Mini Budget of September 2022 and under the current discounts, first-time buyers benefit from reduced stamp duty rates if they buy a property worth £625,000 or less.

This means there is no stamp duty on the first £425,000 of the value of the property and then 5% on any remainder up to £625,000.

From 1 April 2025, the property limit for the discount for first-time buyers will return to £500,000 and only the first £300,000 of the value of the property will be exempt from stamp duty, with 5% paid on any remainder up to the reduced £500,000 figure.

For all other buyers, for example existing property owners moving to a new home, from April 2025 the £250,000 exemption will be removed and only the first £125,000 of a property purchase will be stamp duty free, with a 2% rate charged from £125,000 to £250,000.

The Budget Red Book policy notes confirmed the four SDLT rates as:

• ‘fixed’ at up to £125,000 at zero,
• up to £250,000 at 5%,
• up to £925,000 at 10% and
• £1.5m and over at 12%.

There were also immediate increases in SDLT on second home purchasers with a rise of 2% to a rate of 5% from 31 October 2024 while foreign buyers also face an increase.

In addition, the single rate of SDLT that is charged on the purchase of dwellings costing more than £500,000 by corporate bodies and company structures increased from 15% to 17%, again effective from 31 October 2024.