Stamp Duty Land Tax (SDLT) is a critical aspect of the property-buying process in the UK. Whether you’re a first-time buyer, purchasing a second home, or investing in a buy-to-let property, understanding the current stamp duty rates and thresholds is essential. In this updated guide for 2024, we’ll cover everything you need to know, from basic rates to special exemptions and surcharges.
What is Stamp Duty?
Stamp Duty Land Tax is a tax payable on property or land transactions in England and Northern Ireland. Scotland and Wales have their own versions of stamp duty, known as Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT), respectively. The amount you pay depends on the property’s purchase price, and different thresholds apply depending on whether you’re a first-time buyer, a homeowner, or a property investor.
2024 Stamp Duty Rates and Thresholds
In 2024, the basic SDLT rates for residential properties remain as follows:
- Up to £250,000 – 0%
- £250,001 to £925,000 – 5%
- £925,001 to £1.5 million – 10%
- Above £1.5 million – 12%
These rates apply to most homebuyers purchasing a primary residence. Stamp duty is calculated on the portion of the property’s price that falls within each band. For example, if you buy a home for £600,000, you’ll pay 0% on the first £250,000 and 5% on the remaining £350,000.
First-Time Buyer Relief
First-time buyers can benefit from stamp duty relief, making property ownership more affordable. As of 2024, the thresholds for first-time buyers are:
- Up to £425,000 – 0%
- £425,001 to £625,000 – 5%
If you’re purchasing a property above £625,000, first-time buyer relief does not apply, and you’ll be subject to the standard rates.
Surcharges for Second Homes and Buy-to-Let Properties
If you’re buying a second home or an investment property, an additional 3% surcharge applies to the standard stamp duty rates. This surcharge is calculated on the total purchase price of the property and is applicable even on the lowest rate band.
For example, for a second home purchase of £300,000, you’ll pay 3% on the first £250,000 and 8% on the portion between £250,001 and £300,000.
Non-UK Resident Buyers
Since 2021, non-UK residents face an additional 2% surcharge when purchasing residential properties in England and Northern Ireland. This charge is levied on top of the standard rates and any other surcharges, such as those for second homes.
Exemptions and Reliefs
While most homebuyers must pay stamp duty, there are a few exemptions and reliefs available in 2024:
- Charities: Charitable organisations may be eligible for stamp duty relief if the property will be used for charitable purposes.
- Zero-carbon homes: Some environmentally friendly homes may qualify for relief if they meet specific sustainability standards.
- Transfers due to divorce or separation: In cases where property is transferred between partners as part of a divorce settlement, stamp duty may not apply.
Off-Market Transactions and Inheritance
Property transactions that occur off-market (such as transferring ownership within a family) may be subject to stamp duty if money changes hands. However, if you inherit a property, you won’t pay stamp duty, although other taxes like inheritance tax may apply.
