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Should we buy a property in 2023/2024? – SDLT Update

Date Added 26.10.23

Are you unsure on whether to buy a property in 2023/2024? The looming end of the temporary relief on Stamp Duty Land Tax (SDLT) may be the reason to think about this now and save yourself thousands of pounds!

The SDLT threshold increase to the rate announced in September 2022 has provided the opportunity for many first-time buyers to get on the property ladder. The savings made by first-time buyers has helped them to increase their deposit and to pay a reduced amount of tax on a home that costs more than £425,000.

However, be aware, that the SDLT threshold is coming to an end on 31st March 2025.

SDLT thresholds will return to the previous levels in just 18 months. This means that from the 1st April 2025 the cost of a property on which homebuyers start paying stamp duty land tax will return to the previous level of £125,000 from £250,000 and to £300,000 from £425,000 for first-time buyers. For example:

Current SDLT rate on a standard freehold property purchase, UK resident/main residence:

The SDLT homebuyers pay when buying a freehold property for £350,000 before 31st March 2025 deadline is calculated as follows:

  • 0% on the first £250,000= 0
  • 5% on the remaining £100,000 = £5,000
  • Total SDLT = £5,000
SDLT rate from 31 March 2025 on a standard freehold property purchase, UK resident/main residence:

The SDLT homebuyers pay when buying a freehold property for £350,000 after 31st March 2025 deadline is calculated as follows:

  • 2% on the first £250,000 = £2,500
  • 5% on the remaining £100,000 = £5,000
  • Total SDLT = £7,500

Homebuyers who complete before the 31st March 2025 deadline could save as much as £2,500 in SDLT.

The deadline is fast approaching and homebuyers need to be aware that a residential property transaction takes an average of 12 to 16 weeks to complete.  Therefore, any property completion date that falls after this deadline could result in a significant tax burden.

If you are currently considering buying a residential property, planning ahead may be the right approach to reduce the risk of paying higher SDLT and missing the deadline.

Whether buying or Selling a property getting the advice and guidance you need is invaluable. For all your property needs…Talk to Tollers on 01604 258101, our experienced conveyancing teams are on hand to guide you through.

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