Stamp duty land tax (SDLT) Autumn Budget update

As of tomorrow (31 October 2024), the higher rates for additional dwellings (HRAD), normally payable on the purchase of investment properties and second homes, will increase from 3% to 5%. 

This compares with a 6% higher rate currently in place for Scottish land and property transactions and a 4% higher rate currently applicable in Wales. 

There will also be a 2% increase in the flat rate of SDLT applying where a non-natural person (i.e. company, collective investment scheme or partnership with a corporate partner) purchases a single dwelling for more than £500,000, from 15% to 17%. 

In introducing these changes, the Government is hoping to give first time buyers and those simply looking to move home a comparative advantage over second home buyers, landlords and businesses purchasing residential property. 

These measures will apply to transactions with an effective date (usually the date of completion) on or after 31 October 2024. Where contracts are exchanged before 31 October 2024 but the transaction will complete or be substantially performed on or after that date, transitional rules need to be considered. 

Temporarily increased SDLT thresholds only in place until 31 March 2025 

The Government has not committed to keeping in place a number of temporary SDLT measures introduced by the previous government. 

The temporary 0% SDLT threshold applying on the purchase of residential property will drop from £250,000 to £125,000 on 1 April 2025. 

The nil-rate threshold for first time buyers’ (FTB) relief will drop from £425,000 to £300,000 on 1 April 2025 and the maximum house price on which FTB relief can be claimed will drop from £625,000 to £500,000. 

Non-resident surcharge 

Rather surprisingly, there was no announcement today regarding an increase to the surcharge payable on the purchase of residential property by non-UK residents. Labour’s manifesto outlined a 1% increase in the current 2% non-resident surcharge to raise revenue. 

Capital gains tax (CGT) 

When it comes to the sale of property and CGT, the rates of CGT payable on the sale of non-residential property will be increasing today from 10% to 18% for basic rate taxpayers and 20% to 24% for higher and additional rate taxpayers. 

However, it has been confirmed that the rates of CGT payable on the disposal of residential property will remain at 18% and 24%.  

For further guidance on the impact of these changes, please contact Victoria Hutson or a member of our SDLT team.