Twice a year the sitting government gives an update on the UK’s economy. They announce policy changes that will address any concerns and boost economic growth over the following six months. This year’s Autumn Statement was announced on 30th October. It was the first Budget made by a Labour government for 14 years, and many big announcements were anticipated.
The Statement covered everything from inheritance tax to National Insurance payments. In this article we’ll discuss the elements impacting the housing market: Stamp Duty Land Tax and capital gains tax.
Stamp Duty Land Tax
Stamp Duty Land Tax (SDLT) is a tax that is charged on the purchase of property in England and Northern Ireland. There are different tax rules for this in Scotland – the Land and Buildings Transaction Tax – and Northern Ireland – the Land Transaction Tax. SDLT applies to residential and commercial properties and is payable when land or property is purchased. SDLT can seem complicated as different tax rates apply to different circumstances. Below we’ve given details of the rates that have had changes announced.
Standard SDLT for sole property
The standard rate of SDLT is in place for those where the property will be the sole one owned at the time of purchase. The first £250,000 is tax-free, with incremental taxes applicable on higher amounts, as in the below table:
| Property value | Percentage due |
| £0 – £250,000 | 0% |
| £250,001 – £925,000 | 5% |
| £925,001 – £1,500,000 | 10% |
| £1,500,001 + | 12% |
Additional properties
Prior to the Autumn Statement, the SDLT for additional residential properties was an additional 3% on top of the standard rates. In the Statement, however, the Chancellor increased this additional rate by 2%, to 5%. The change was due to be brought in with almost-immediate effect, from October 31st. The table below shows the situation with SDLT as of November 2024.
| Property value | Single residential property SDLT | Additional residential property before 31/10/24 | Additional residential property from 31/10/24 |
| £0 – 250,000 | 0% | 3% | 5% |
| £250,001 – £925,000 | 5% | 8% | 10% |
| £925,001 – £1,500,000 | 10% | 13% | 15% |
| £1,500,001 + | 12% | 15% | 17% |
Example SDLT calculation for sole residential property
If a property is purchased for £450,000 and is the sole residential property owned, the breakdown is:
First £250,000 @ 0% = £0
£250,001 – £450,000 @ 5% = £10,000
Total stamp duty due: £10,000
Example SDLT calculation for additional residential property:
If a property is purchased for £450,000 and is the second residential property owned, the breakdown is:
First £250,000 @ 3% = £7,500
£250,001 – £450,000 @ 8% = £16,000
Total stamp duty due: £23,500
Please note: SDLT is not payable on additional residential properties bought for under £40,000.
First time buyer relief
There is a relief available for first-time buyers. This applies whether you or anyone you are purchasing the property with are purchasing their first property. The threshold for starting to pay SDLT is higher for first-time buyers. Prior to the Autumn Statement, the threshold was set at £425,000. SDLT of 5% was due on property values from £425,001 to £625,000. No relief was available for properties purchased for more than £625,000.
| Property value | Percentage due |
| £0 – £425,000 | 0% |
| £425,001 – £625,000 | 5% |
| £625,001 + | No relief available |
The Chancellor announced changes to the first-time buyer relief, in the Autumn Statement. From April 2025, the threshold for starting to pay SDLT will reduce to £300,000. So, from April 2025, the SDLT rates for first-time buyers will be:
| Property value | Percentage due |
| £0 – £300,000 | 0% |
| £300,001 – £625,000 | 5% |
| £625,001 + | No relief available |
Example SDLT calculation for residential property with first-time buyer relief
If a property is purchased for £350,000 and is eligible for first-time buyer relief, the breakdown is:
Until April 2025:
First £425,000 @ 0% = £0
Total stamp duty due: £0
From April 2025:
First £300,000 @ 0% = £0
£300,001 – £350,000 @ 5% = £2,500
Total stamp duty due: £2,500
Capital Gains tax
Capital Gains tax is the tax payable on the profit on an asset that has increased in value since purchase, after its sale. Whilst sole residential properties are exempt from Capital Gains tax, second homes, buy-to-let properties and business premises are not. There is a Capital gains tax-free allowance of £3,000. This means the first £3,000 of profit gained is not taxed. How much Capital Gains tax is due depends on your tax band and the asset that the profit was made on.
Residential properties
The Capital Gains tax rate is increasing as of the Autumn Statement, with immediate effect. The rate for basic rate taxpayers will increase from 10% to 18%. The rate for higher rate taxpayers will increase from 20% to 24%.
For residential properties – but not your main residence – the Chancellor announced that the rates of Capital Gains tax would be maintained.
Example Capital Gains tax calculation for additional residential property
If you purchased a buy-to-let property previously for £150,000 and it is sold for £200,000:
Profit gained: £50,000
Tax-free allowance: £3,000
Taxable profit: £47,000
Capital gains tax (basic rate taxpayer) @ 18%: £8,460
Capital gains tax (higher rate taxpayer) @ 24%: £11,280
Still unsure of what the recent announcements mean for the housing market?
If you’re still unsure about your SDLT or Capital Gains tax obligations, contact our friendly and knowledgeable team. They will be happy to help but they would always advise you speak with a tax specialist.
Please note: all threshold and rate given are accurate as of November 2024.
