After weeks of rumour and speculation, Chancellor Rachel Reeves delivered Labour’s first Budget in 14 years and, in doing so, introduced significant changes to Stamp Duty Land Tax in England.
What is Stamp Duty Land Tax?
Stamp Duty Land Tax (SDLT) is a tax you must pay when you purchase an interest in land or property in England. The amount of SDLT payable will depend on the purchase price and the type of property (e.g., main residence, second home, buy-to-let, or first time buyer purchase). The SDLT is to be paid within 14 days of completion.
SDLT Increase
Following the Budget 2024 announcement, the SDLT surcharge on additional dwellings (these are second homes, buy-to-lets, and company purchases of residential property) will increase by 2% for each property value bracket. This increase comes into immediate effect as of 31 October 2024.
Many people contemplating purchasing holiday homes or investment properties will now have to carefully consider how the increase in the SDLT rate will affect them and whether they can afford to continue purchasing additional property.
The new rates for additional properties are as follows:
| Value of Property | New Rate of SDLT for additional properties |
| Up to £250,000 | 5% |
| £250,001 to £925,000 | 10% |
| £925,001 to £1.5 million | 15% |
| Over £1.5 million | 17% |
The new SDLT rates are now in effect and will apply to all purchases where contacts have been exchanged after midnight on 30 October 2024.
The SDLT increase reflects Labour’s commitment in their manifesto with the hope that the rise will discourage and disincentivise people buying second homes and investments and instead make it easier and more accessible for first time buyers and people buying a main residence.
First Time Buyer Relief
Whilst the increased surcharge on additional properties is meant to help first time buyers by increasing the availability of properties, the Budget also confirmed that the first-time buyer relief thresholds will reduce next year.
The relief thresholds introduced by the previous government in 2022 mean that first-time buyers currently benefit from not having to pay SDLT if they purchase a property of £425,000 or less.
As of April 2025, SDLT first-time buyer thresholds will be reduced, meaning that no SDLT will be payable on properties of £300,000 or less.
The effect is that whilst more properties might be available, first-time buyers will need to have had more saved and factor in SDLT costs before considering purchasing their first home.
Wales and Land Transaction Tax
It is important to note that the SDLT and changes discussed above do not apply in Wales. Instead, Land Transaction Tax (LTT) applies. Whether Wales will follow suit and introduce similar changes to LTT is yet to be seen.
If you are looking to purchase a property and would like advice on how the SDLT changes may affect you or advice on your purchase generally, our expert conveyancing solicitors at Berry Smith can help. Please do not hesitate to contact us via residentialproperty@berrysmith.com or 02920 345511.