Chancellor announces SDLT threshold increases

On 23 September 2022, then Chancellor Kwasi Kwarteng announced permanent reforms to stamp duty land tax (SDLT) as part of the Growth Plan, increasing the thresholds at which the tax on residential property begins to be paid¹. The changes took effect immediately after the House of Commons approved a Provisional Collection of Taxes Motion under the Provisional Collection of Taxes Act 1968¹. HM Revenue & Customs says the change applies from 23 September 2022 to 31 March 2025².

The three measures were: an increase in the nil rate band, the threshold up to which SDLT is not paid, from £125,000 to £250,000; an increase in the nil rate band for first-time buyers from £300,000 to £425,000; and an increase in the maximum amount first-time buyers can pay for a home and still be eligible for relief, from £500,000 to £625,000¹.

SDLT applies in England and Northern Ireland only; Scotland has Land and Buildings Transaction Tax and Wales has Land Transaction Tax¹. SDLT is charged on a slice basis, so more expensive properties face progressively higher rates¹. The Office for Budget Responsibility said SDLT raised £14.1 billion in 2021-22, of which £10 billion came from residential property and £4.1 billion from non-residential property¹. The higher rates table for additional dwellings also changed, with the 3% band raised from £125,000 to £250,000, and the nil rate threshold for payments of rent rose from £125,000 to £250,000³.

During the Autumn Statement on 17 November 2022, Chancellor Jeremy Hunt announced a sunset clause ending the relief in March 2025¹. The government said:

The Institute for Fiscal Studies welcomed the reduction but said the first-time buyer relief increase would create a higher cliff-edge for properties just above £625,000, and the Resolution Foundation said the benefit would be uneven, with most of it in London and the South of England¹. The Financial Times quoted property sector experts predicting the measure would not greatly support buyers or the housing market, as its impact could be overshadowed by higher borrowing and mortgage costs¹.

Why it matters for households

Anyone buying residential property in England and Northern Ireland between 23 September 2022 and 31 March 2025 pays SDLT under the higher thresholds². A buyer who would previously have started paying the tax above £125,000 now starts above £250,000, and first-time buyers get a £425,000 nil rate band, with relief available on purchases up to £625,000¹. The relief is temporary: purchases from 1 April 2025 are not covered, and HMRC's guidance on linked purchases records that the thresholds and rates for residential property changed on 1 April 2025⁴. Where two or more transactions involve the same buyer and seller they count as linked, and the buyer pays SDLT on the total value of all linked transactions, which can mean a higher rate than if each were counted separately⁴.

What happens next

The Stamp Duty Land Tax (Relief) Bill 2022-23 was introduced in the House of Commons on 24 October 2022¹. The government tabled amendments to make the reduction temporary before the Committee of the Whole House stage, which took place alongside the Bill's third reading on 10 January 2023¹. The Bill received Royal Assent on 8 February 2023 as the Stamp Duty Land Tax (Temporary Relief) Act 2023¹. The proposed end of the relief on 31 March 2025 was not debated in the Commons during the Autumn Statement on 17 November¹. HMRC estimated additional implementation costs of up to £2,700,000 for staff resources and IT systems changes³.