The Chancellor announced that, with effect from tomorrow, the 3% surcharge which applies to residential property purchases by individuals who already own residential property, by companies, or by certain trusts, would increase to 5%.
This will in the main have a detrimental impact on property investors but may also increase the SDLT liability for those buying a new home if they already own another residential property and don’t meet the criteria for the ‘replacement main residence’ relaxation.
The Government have also announced that the current 15% rate which applies to certain purchases of residential property over £500,000 by limited companies (or partnerships which have corporate partners) will increase to 17%. In general terms this charge will apply to purchases where the property will not be used in the company’s business and will instead be occupied by directors/shareholders (or people connected with them).
The 0% band for residential property is currently subject to a temporary increase from £125,000 to £250,000. This will come to an end on 31 March 2025, at which time the 0% band will revert to £125,000.
First time buyers also currently benefit from a temporarily increased 0% band of £425,000 on purchases of property up to a price of £625,000. From 1 April 2025 the 0% band available to first time buyers will reduce to £300,000 on property purchases up to a price of £500,000.
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