April brings Changes to Stamp Duty in England but not in Wales
England Stamp Duty Changes
Stamp Duty is a tax payable on the purchase of property in England and the rates are changing from 1st April 2025. You must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price in England and Northern Ireland. The amount you pay depends on several factors, including whether you are purchasing a property for the first time, buying as a corporation, replacing a main residence, or purchasing an additional property.
Currently, in England and Northern Ireland, you have to pay stamp duty if your property is worth over £250,000 and is your only residence. However, from 1st April 2025, this threshold will fall to £125,000. This means buyers will start paying the tax on a greater portion of their purchase price. If you are a first-time buyer, you only start to pay stamp duty if the property you are buying is worth over £425,000. However, from 1 April 2025, this threshold will fall from £425,000 to £300,000. This will reduce the tax-free portion available to those entering the property market.
Wales Land Tax
The situation in Wales is different because the Land Transaction Tax (LTT) replaced Stamp Duty in 2018. The Welsh Revenue Authority collects and manages the tax for the Welsh Government. Currently, you have to pay it if you buy a property or land worth over £225,000. There are different rules if you already own one or more residential properties, and you may need to pay higher residential rates. You pay the tax when you buy a freehold property, buy a new or existing leasehold, or if you are transferred land or property in exchange for payment (e.g. you start a mortgage or buy a share in a house). The rates were changed on 11 December 2024 so there will be no change in April.
As LTT is a self-assessed tax it is the responsibility of the taxpayer to complete and submit an accurate tax return and pay any tax due. How much you pay depends on if the property is residential or non-residential. The amount you have to pay may be affected if you are buying a second property or more than one property or property across the border in England.
Unlike England, there are no first-time buyer reliefs in Wales. However, many first-time buyer homes in Wales fall close to or within the zero-rate threshold of £225,000.
For buyers in Wales the LLT rates are:
- No tax on the first £225,000 of the purchase price.
- 6% on amounts between £225,001 and £400,000.
- 7.5% on £400,001 to £750,000.
- 10% on £750,001 to £1.5 million.
- 12% on anything above £1.5 million.
Reliefs
In certain cases, you may be able to get a relief that reduces the amount of tax you pay. There are specific reliefs for buying more than one property, moving property around a group structure, or charities buying property.
For more information about Stamp Duty Land Tax and Land Transaction Tax please contact our experienced conveyancing lawyers on 01492 596596 or 874774.