At The Tax Faculty, we’ve recently seen a significant increase in clients reaching out about Stamp Duty Land Tax (SDLT). Changes announced in the 2024 Budget have left many property buyers, especially those purchasing additional properties, seeking clarity and advice.

In this blog, we’ll break down these changes, explain who they affect, and offer insights into how we can help you navigate them.

Demystyfying Stamp Duty Land Tax (SDLT)

Stamp Duty Land Tax (SDLT) is a tax applied when purchasing property or land in England and Northern Ireland. Whether you’re buying a freehold property, a leasehold, a share in a house, or even taking on a mortgage, SDLT may be applicable depending on the property’s value and its intended use.

The rates and thresholds vary based on several factors, including whether you’re a first-time buyer or purchasing additional property.

What Is Stamp Duty Land Tax (SDLT)?

The Chancellor, Rachel Reeves, has introduced notable changes to SDLT rates for buyers of second homes, rental properties, and corporate purchases:

1. Increase in Additional Property Rates

o The SDLT surcharge for second-home buyers and landlords will rise from 3% to 5% as of 31 October 2024.

2. Corporate Purchases

o Companies buying properties worth over £500,000 will see an increase in SDLT from 15% to 17%.

These changes are expected to impact landlords, second-home buyers, and investors significantly, with the goal of increasing government revenue, which already reached £15.4 billion in 2022/23.

Key Budget 2024 Changes to Stamp Duty

For residential property purchases, the rates are:

Property Price Standard Rate Additional Rate

£0 - £250,000 0% 5%

£250,001 - £925,000 5% 10%

£925,001 - £1.5 million 10% 15%

Over £1.5 million 12% 17%

First-time buyers benefit from a higher threshold of £425,000, but this will revert to £300,000 in March 2025.

Current SDLT Rates in England and Northern Ireland

Stamp duty operates differently in Scotland and Wales:

• Scotland: Land and Buildings Transaction Tax (LBTT) applies, with an Additional Dwelling Supplement (ADS) of 6% for second properties.

• Wales: Land Transaction Tax (LTT) includes a higher rate starting at 4% for additional properties.

SDLT in Scotland and Wales

In England and Northern Ireland, SDLT must be paid within 14 days of completion. Late payments can result in fines or interest charges. Most buyers handle this through their solicitors, but payments can also be made online or in person.

When and How to Pay SDLT

The SDLT increases could significantly affect the cost of property purchases for landlords, second-home buyers, and companies. For instance:

• A landlord buying a property for £300,000 will now pay £15,000 SDLT compared to the previous £9,000—an additional £6,000.

• Companies purchasing high-value properties will face steeper taxes, potentially reshaping investment strategies.

These changes underscore the importance of careful tax planning and expert advice.

Why This Matters To You

At The Tax Faculty, we specialise in helping clients manage their tax obligations effectively. Whether you need assistance calculating your SDLT liability, exploring tax relief options, or planning for upcoming property purchases, we’re here to guide you.

We provide:

• Bespoke advice tailored to your circumstances.

• Tax filing and compliance services to avoid penalties.

• Strategic insights for landlords and investors to optimise their property portfolios.

Navigating SDLT changes can be challenging, but with the right advice, you can make informed decisions and potentially save thousands. Contact The Tax Faculty today for expert guidance on all aspects of Stamp Duty and property tax planning.

Our team is here to make complex tax matters simple for you. Call us now or book your free consultation to get started.

Stay informed, stay ahead. Let us help you manage your taxes with confidence.

How The Tax Faculty Can Help

Capital Gains Tax Expertise: The Tax Faculty LLP Managing Partner Charles Tateson Named UK Capital Gains Tax Advisor of the Year 2023

The Finance Monthly Taxation Awards recognises the achievements of tax professionals from around the globe.

Winning such an award is no small feat. It is a reflection of hard work, extensive knowledge, and an ability to navigate the intricacies of the UK tax system.

Read more about Charles and the award here.

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