We supported SHL to run a compliant collective consultation process, following the need to...
A summary of the recent updates to Stamp Duty Land Tax
Over the last few months, political decisions have altered the course of the country, with a mini-budget in September causing some of the largest economic turbulence in recent memory. Stamp Duty Land Tax was one the key topics discussed, with new thresholds for when the tax is incurred altering, often in favour of first time buyers. Here, we cover a brief overview of the relevant updates and changes to be aware of.
What is Stamp Duty Land Tax?
Stamp Duty Land Tax (SDLT) is a tax that is incurred when a property is purchased, provided certain requirements are met. For example, the tax applies if the property is bought outright or with the assistance of a mortgage or whether it is a freehold or leasehold property. Rates do however vary between commercial and residential properties. SDLT must be paid within 14 days of the completion of the purchase, which is ordinarily organised by the conveyancer or solicitor on behalf of the client.
Under the mini-budget, the purchase price of a residential property which exempts buyers from paying SDLT was increased from £125,000 to £250,000 however, for first time buyers, purchasing a property up to a value of £425,000 will be exempt from SDLT. Do note however, that these figures vary dependent on the country in the UK in which the purchase is being made, so it is important to check the relevant figures as appropriate.
Please see below a government produced table detailing the changes to SDLT, prior and following the announcement in September:
Following Liz Truss’ resignation, new Conservative leader and Prime Minister Rishi Sunak and his government have been repealing and amending several of the pledges made in the Truss-Kwarteng administration. New Chancellor Jeremy Hunt has since announced that the above changes to SDLT are temporary and only in place until 31 March 2025. Following this date, there will be a reversal of these measures.
What does this mean for you?
This announcement has prompted some calm for purchasers, with the reassurance that SDLT rates, especially for first time buyers, will remain constant for the next few years. In addition, it allows buyers to consider their options before making this important decision.
It also gives a sense of certainty to the market that (hopefully) there will be no further changes to rates for the foreseeable. This should promote a confidence amongst prospective buyers and potentially boost the market.
If you require any assistance with Stamp Duty Land Tax, particularly on commercial properties, please do get in touch on 01622 759 900.