Stamp Duty Land Tax in England and Northern Ireland
Stamp duty land tax has gone through numerous changes in recent years. During the pandemic, for instance, people who were moving house enjoyed temporary property tax holidays that were in place around the UK.
The stamp duty land tax holiday in England and Northern Ireland was the last to close, ending on 30 September 2021. The pre-pandemic regime returned for the 2022/23 tax year, charging 2% on property purchases above £125,000.
A temporary stamp duty relief was then announced on 23 September 2022 and will remain in place until 31 March 2025, increasing the residential nil-rate tax threshold from £125,000 to £250,000 for residential property purchased between these two dates.
The threshold at which first-time buyers begin to pay stamp duty land tax is £425,000 for property purchases entered into from 23 September 2022, rather than £300,000. Likewise, the maximum value of a property on which first-time buyers’ relief can be claimed is now £625,000, rather than £500,000.
A 5% tax charge applies to the portion of your new property’s value that falls between £250,001 to £925,000. The higher stamp duty land tax rates and thresholds also apply (see table below).
For taxpayers trying to purchase additional residential property, a 3% stamp duty land tax surcharge applies where the value is £40,000 or more. This surcharge is added to the other tax rates on the whole purchase price.
Land and Buildings Transaction Tax in Scotland
For people buying a residential property in Scotland, no land and buildings transaction tax will be owed on the first £145,000 of the property price.
The 2% land and buildings transaction tax rate kicks in for homes worth between £145,001 and £250,000.
A 5% rate applies on the slice of the residential property price between £250,001 and £325,000, while a 10% rate kicks in between £325,001 to £750,000. Above this, a 12% rate is levied.
People trying to buy an additional residential property in Scotland pay a surcharge at 6% on properties worth more than £40,000 for transactions entered into on or after 16 December 2022. For transactions entered into before this date, a 4% tax applies. This ‘additional dwelling supplement’ also applies to the total purchase price.
First-time buyers in Scotland pay no land and buildings transaction tax on properties worth less than £175,000. Tax will apply at various rates on any excess above this amount.
Land Transaction Tax in Wales
In Wales, the pre-pandemic land transaction tax regime has applied since 1 April 2018.
If you do not own other property, no land transaction tax is owed on the first £225,000 of a residential property in Wales.
A 6% rate applies on the portion between £225,001 and £400,000, before a 7.5% rate is liable on the residential property price worth between £400,001 and £750,000.
Above £750,000 and up to £1.5m, a 10% tax rate is in place, and a 12% rate applies to the portion above £1.5m.
You may need to pay higher rates if you buy a residential property in Wales for £225,000 or more and already own one or more residential properties.
Year-End Tax Guide 2023/24
If you would like to access our full year-end tax guide, simply click here to view the PDF.
Alternatively, you can view an area specific mini blog from the list below:
1. Personal Allowances and Reliefs
2. ISAs
6. Business Asset Disposal Relief
8. Tax-Efficient Staff Benefits
10. VAT
11. Penalties
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