Property purchases in the UK within the stamp duty threshold are tax-free. The threshold depends on several factors, such as whether an individual is a first-time or an additional property buyer, a UK resident or not, where the property is bought, if it is a residential or commercial property, and more.
This article explores UK stamp duty thresholds and provides a quick guide to reliefs, especially first-time buyer relief, that allow potentially huge tax savings for the property buyer.
Stamp Duty Threshold UK 2024
Homebuyers in the UK do not pay stamp duty if their property’s purchase price is within the annual threshold. The thresholds and rates for residential and non-residential (or mixed-use) properties differ and are based on where the property is bought and other circumstantial factors.
The England and Northern Ireland refer to this property tax as Stamp Duty Land Tax (SDLT); Scotland, Land and Buildings Transaction Tax (LBTT), and Wales, Land Transaction Tax (LTT).
Residential Properties Stamp Duty Threshold
The most recent increase of the stamp duty threshold London was implemented by the previous chancellor Kwasi Kwarteng in the September mini-budget 2022. In the 2024/25 tax year, these are the residential property thresholds throughout the UK:
| Stamp Duty | Threshold |
|---|---|
|
SDLT |
£250,000 |
|
LBTT |
£145,000 |
|
LTT |
£225,000 |
Non-Residential/Mixed Use Properties Stamp Duty Threshold
England and Northern Ireland have different levy rates between freehold and leasehold properties, but their thresholds are the same. Currently, non-residential or mixed-use properties are only paid stamp duty levies once their purchase price exceeds the following thresholds:
| Stamp Duty | Threshold |
|---|---|
|
SDLT |
£150,000 |
|
LBTT |
£150,000 |
|
LTT |
£225,000 |
Check out Stamp Duty Land Tax Calculator UK for further guidance on non-residential property stamp duty rates and to get a rough calculation of the tax bill.
First-Time Buyer Stamp Duty Threshold in UK
Individuals eligible for first-time buyer relief benefit from a higher stamp duty threshold. Here are the first-time buyer thresholds throughout the UK:
| Stamp Duty | Threshold |
|---|---|
|
SDLT |
£425,000 |
|
LBTT |
£175,000 |
|
LTT |
£225,000 |
First-time buyers in England and Northern Ireland do not pay stamp duty when the property falls within the threshold price of £425,000. Between that amount up to £625,000, eligible individuals only pay 5% of stamp duty. The relief only works for legitimate first-time buyers whose purchase property does not cost more than £625,000.
Wales has no official tax relief specifically for first-time buyers. Regardless of whether they are first-time buyers or not, they do not pay stamp duty up to £225,000.
Check out our guide to first-time buyer stamp duty relief for more information about eligibility, how the relief works, shared-ownership conditions, and more.
Other Stamp Duty Reliefs
Aside from the first-time buyer relief, the UK government offers other stamp duty reliefs and exemptions to help people up the property ladder. Reliefs may apply to other circumstances, such as the following:
- Multiple dwelling
- Companies buying individuals’ homes
- Employers purchasing employees’ houses
- Crown employees
- Local authorities’ acquisitions
- Registered social housing providers
- Charities purchasing for charitable purposes
- Individuals exercising the right to buy properties
- Property developers supplying amenities to communities
- Companies transferring properties to other companies
- Property investment funds such as Property Authorised Investment Funds (PAIFs) and Co-ownership Authorised Contractual Schemes (CoACSs)
Stamp duty returns must be filed to HMRC with or without stamp duty tax to pay.
Frequently Asked Questions
In England and Northern Ireland, first-time buyers do not pay stamp duty tax up to £425,000 and 5% up to £625,000.
During the autumn statement on November 17, 2022, the government declared that the Stamp Duty reductions implemented by the preceding administration in September would not be permanent, with intentions to revert the SDLT thresholds to their former levels starting March 31, 2025.
There are several exemptions to stamp duty. Circumstances include when there’s no exchange of money or other payments for a land or property transfer, when the property is inherited through a will, and when the property is transferred due to divorce or dissolution of a civil partnership, and more.
According to property analysts, estate agents, and economists, the current market favours buyers, with activity, sales, and prices rebounding more swiftly than anticipated since the beginning of 2024. Several experts infer this could be an opportune moment to purchase.
Individuals are exempt from paying SDLT if they receive a commercial property lease lasting over seven years, provided that the premium is below £40,000 and the annual rent is less than £1,000. Additional exemptions for SDLT on commercial leases include leasebacks and extensions.
How Legend Financial Can Help
Minimising stamp duty bills on property purchases is possible with proactive planning. Staying within the stamp duty threshold is one way to curb tax, but this is not applicable all the time. Legend Financial will walk you through reliefs and exemptions that you may be eligible for. Our goal is to help you make the most tax-efficient decisions.
We have been in the industry for over ten years and have served all kinds of clients and tax situations. From helping you curb your stamp duty to filing your returns, you can entrust your tax affairs to our experts. Reach us today!
