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Home / News / Autumn Budget 2024 Update – Property purchasers face SDLT increases effective today

Autumn Budget 2024 Update – Property purchasers face SDLT increases effective today

31 October 2024

Yesterday Chancellor Rachel Reeves delivered Labour’s first budget since being elected to government.

Reeves announced that there would be an increase in Stamp Duty Land Tax ( SDLT) for second homes. The government also confirmed the position on first time buyer reliefs due to come to an end in March 2025.

Second-home buyers now face a SDLT surcharge rise of 2% to 5% above the standard residential rates of SDLT effective from Thursday 31st October 2024.

The measure also increases 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%.

The government’s policy objective by increasing the higher rates of SDLT on purchases of residential property is expected to disincentivise the acquisition of second homes and buy-to-let properties, freeing up housing stock for main home and first-time buyers. The measure will also ensure companies and other non-natural persons buying dwellings for more than £500,000 which are not intended to be used for a commercial purpose pay the highest rate of SDLT.

Who is likely to be affected?

Individuals purchasing additional residential property such as second homes or buy-to-let properties in England and Northern Ireland, companies and other non-natural persons purchasing residential property in England and Northern Ireland. This measure does not apply to Scotland or Wales where devolved land transaction taxes apply.

Operative date

The increased rates come into effect for transactions with an effective date (usually the date of completion), or which are substantially performed on or after 31st October 2024.

Where contracts are exchanged prior to 31 October 2024 but complete or are substantially performed on or after that date, transitional rules may apply, so that contracts which were exchanged before the 31st October 2024 but which are completed or substantially performed after that date continue to pay the surcharge at 3% above the residential rates in force at the effective date of transaction.

First Time Buyer Relief

The government also confirmed that the temporary relief for first time buyers, introduced by the previous Conservative government in 2022, will end on 31st March 2025, reverting to the 2022 SDLT rates,

  • The residential nil rate band will revert from £250,000 to £125,000
  • The First -time Buyers’ Relief nil rate band will revert from £425,000 to £300,000
  • The maximum property value that is eligible for First-time Buyers’ Relief will revert from £625,000 to £500,000

If you have any queries regarding your property transaction, please contact us on enquiries@redkitelaw.co.uk.

This article was written by Redkite Solicitors,  Katherine Simpson. To find out more about Katherine Simpson and the support that she can provide to you, visit her website profile here: https://www.redkitesolicitors.co.uk/team/kathryn-simpson/

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.