Understanding SDLT in 2025: A Friendly Guide for UK Property Buyers

Whether you're stepping onto the property ladder for the first time, expanding your portfolio, or purchasing through a limited company, understanding Stamp Duty Land Tax (SDLT) is crucial. With recent changes effective from 1 April 2025, it's more important than ever to be informed. Let’s break it down.

What is SDLT and Why Should You Care?

Stamp Duty Land Tax (SDLT) is a tax paid when buying property or land in England or Northern Ireland. The amount depends on the property’s purchase price and your buyer status — whether you’re a first-time buyer, purchasing an additional property, or buying through a company.

Source: HMRC: Stamp Duty Land Tax

Key Changes from 1 April 2025

• The nil-rate threshold for residential properties has decreased from £250,000 to £125,000.

• For first-time buyers, the threshold has reduced from £425,000 to £300,000.

• The maximum purchase price eligible for first-time buyer relief has lowered from £625,000 to £500,000.

• The surcharge for additional properties has increased from 3% to 5%.

These changes are designed to “rebalance” the housing market but may significantly impact your purchasing decisions.

1. SDLT for First-Time Buyers

If you're buying your first home, congratulations. The government offers relief to help you get started.

First-Time Buyer Relief (from April 2025):

• No SDLT on properties up to £300,000.

• For properties between £300,001 and £500,000, a 5% SDLT applies to the portion above £300,000.

• No relief for properties above £500,000.

Example:

• Property Price: £350,000

• SDLT: 5% on £50,000 = £2,500

Note: You must be a genuine first-time buyer, meaning you’ve never owned property anywhere in the world.

Source: First-time buyer relief (gov.uk)

2. SDLT for Additional Properties

If you’re purchasing an additional property — such as a buy-to-let or holiday home — you’ll face higher SDLT rates.

Additional Property SDLT Rates (from April 2025):

Example:

• Property Price: £300,000

• Standard SDLT: £2,500

• Additional Property Surcharge: £15,000

• Total SDLT: £17,500

Tip: If you’re replacing your main residence and sell your previous home within 36 months, you may be eligible for a refund of the surcharge.

Source: Higher rates for additional properties (gov.uk)

3. SDLT for Limited Companies

Purchasing through a limited company can offer tax advantages, but SDLT rates are higher.

Limited Company SDLT Rates (from April 2025):

Example:

• Property Price: £500,000

• SDLT calculated as:

  • 5% on first £125,000 = £6,250

  • 7% on next £125,000 = £8,750

  • 10% on remaining £250,000 = £25,000

  • Total SDLT = £40,000

Note: Properties purchased by companies over £500,000 may be subject to a 15% flat rate unless exemptions apply.

Source: Corporate bodies and SDLT (gov.uk)

How to Pay SDLT

Your solicitor or conveyancer typically handles the SDLT return and payment, but it’s your responsibility to ensure it’s completed.

• Deadline: 14 days post-completion

• Payment: Usually handled by your solicitor, or directly via HMRC’s online service

Late Payment Consequences:

• Interest charges

• Penalties starting at £100 and increasing with time

Summary: Key SDLT Takeaways

• First-Time Buyers: No SDLT up to £300,000; 5% on £300,001–£500,000.

• Additional Properties: 5% surcharge on top of standard rates.

• Limited Companies: Higher SDLT rates apply; potential 15% flat rate for properties over £500,000.

Let’s Discuss Your Property Tax Strategy

At Festa & Co, we help investors, family offices, and overseas buyers navigate the UK property market with clarity and confidence. From deal analysis to structuring strategies, we combine financial expertise with market insight to identify opportunities and manage risk.

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