Measure
On 23 September 2022, the government announced an increase to the threshold above which ‘stamp duty land tax (SDLT)’ must be paid on all acquisitions of residential property in England and Northern Ireland, from £125,000 to £250,000. The change gave a maximum saving of £2,500 for purchasers of residential property. The thresholds and rates on which SDLT is payable above £250,000 remained the same.
Separately, the threshold at which first-time buyers begin to pay SDLT was also increased from £300,000 to £425,000, and the maximum value of a property on which First-Time Buyers’ Relief can be claimed was increased from £500,000 to £625,000. This gave an increased benefit for first-time buyers of up to £11,250.
It was announced today that these changes will now just be temporary, ceasing to have effect on 31 March 2025. The Stamp Duty Land Tax (Reduction) Bill will be amended in this regard to include a ‘sunset’ clause.
Purchasers buying residential property in England and Northern Ireland before 31 March 2025. All purchasers will benefit, including those who purchase second homes and additional residential properties.
The increased exempt thresholds are already in effect from 23 September 2022, but today’s change will mean the old thresholds will apply again from 31 March 2025.
The SDLT cut of up to £2,500 was welcomed by buyers in England and Northern Ireland, but it is too early to tell of its effect on the volume of transactions since its announcement in September. As the measure is now changed to a temporary one, it might become a more immediate incentive for the buyers to bring forward their purchases as the deadline in 2025 gets nearer. Indeed, this is the government’s objective – to stimulate the residential housing market. Given the reduction is planned to be in effect until 31 March 2025, it certainly provides buyers with plenty of notice of the higher SDLT cost (of up to £2,500) which will apply when the band reduction ceases.