Budget watch – upcoming changes to Stamp Duty Land Tax
First Labour budget for 14 years
As the country waits for the Chancellor of the Exchequer Rachel Reeves to deliver the first Labour budget since 2010 Stamp Duty has once again become a topic of conversation. Our Head of Property Mark Laird explains upcoming changes to Stamp Duty Land Tax and how the upcoming budget may affect the planned changes.
What is Stamp Duty Land Tax?
Stamp Duty Land Tax (SDLT) is a tax payable if you buy a property or land over £250,000.00 in England and Northern Ireland. The threshold is higher for first time buyers. Different rules also apply to purchasers who already own land and purchasers who are not resident in the UK.
Liz Truss and the “mini” budget
In September 2022 Kwasi Kwarteng delivered the now infamous mini budget on behalf of the Liz Truss’s short lived Government. One lasting change of the mini budget was a temporary raising of the Stamp Duty Land Tax thresholds to support the housing market. It aimed to lower the upfront cost of moving homes and provide support for those moving home and in particular first time buyers who were struggling to get onto the housing ladder.
To achieve this, the former government made the following changes:
- The threshold for the standard rater of Stamp Duty Land Tax was raised from £125,000.00 to £250,000.00.
- Firsttime Buyers Reflief was amended to that the the threshold from which a first time buyer would pay Stamp Duty Land Tax was increased to £425,000 from £300,000.
- The maximum purchase price for which First-Time Buyers Relief can be claimed was also raised to £625,000 and will return to the previous level from£500,000.
These changes were intended to temporary and are due to expire after 31 March 2025. After this date the thresholds are due to return to their previous level.
Will the budget extend the current deadline?
It is not yet known whether the new Labour Government will extend the current deadline or even make the temporary increase in the Stamp Duty Land Tax thresholds permanent. However, given that Chancellor’s repeated comments on the needs to balance the books hopes of an extension may be optimistic.
How will this affect me?
If the Budget does not alter the planned lowering of the Stamp Duty Land Tax thresholds buyers of residential property priced over £125,000.00 will have until 31 March 2025 to complete their purchase or face a higher tax bill. As with previous Stamp Duty Holidays the lowering of the threshold is likely to cause a temporary increase in demand for conveyancing services which could in turn cause delays. Given that the average purchase will already take approximately three months from receipt of the draft contract papers from the seller’s solicitor potential buyers will need to move quickly if they wish to complete prior to the deadline.
Residential Property & Conveyancing Team
At Morrish Solicitors each of our specialist property lawyers have decades of experience in assisting with purchases of first-time buyers and assisting clients in identifying the correct level of SDLT payable for their purchase.
To enquire about our residential property and conveyancing services please call us on 033 3344 9600 or simply email [email protected] with your request.
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Author: Mark Laird, property.
