SDLT Bill amendments and third reading in Commons

Amendments to make the stamp duty land tax (SDLT) reduction temporary were tabled before the Committee of the Whole House stage, and the Bill's third reading took place on 10 January 2023¹. The legislation, introduced in the House of Commons as the Stamp Duty Land Tax (Relief) Bill 2022-23 on 24 October 2022, received Royal Assent on 8 February 2023 as the Stamp Duty Land Tax (Temporary Relief) Act 2023¹.

The Act increases several thresholds at which SDLT on residential property begins to be paid, reducing the amount paid by many house buyers until 31 March 2025¹. It applies in England and Northern Ireland only; Scotland and Wales have separate property transaction taxes¹. SDLT is charged on a slice basis, with graduated rates so more expensive properties face progressively higher rates¹.

The threshold changes were first announced on 23 September 2022 by then Chancellor Kwasi Kwarteng as permanent reforms, and took effect immediately after the House approved a Provisional Collection of Taxes Motion¹.

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

The proposed end of the SDLT holiday on 31 March 2025 was not debated in the House of Commons during the Autumn Statement¹. 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.

Why it matters for households

Anyone buying residential property in England or Northern Ireland is affected by the thresholds the Act sets, and by the date the relief ends. The higher nil rate band means no SDLT is payable on the portion of a purchase price up to £250,000, rather than £125,000¹. First-time buyers have a nil rate band of £425,000, up from £300,000, and can pay up to £625,000 for a property and still claim the relief, up from £500,000¹. All of these apply until 31 March 2025, after which the relief ends under the sunset clause¹.

The Institute for Fiscal Studies welcomed the reduction but noted that the higher first-time buyers' threshold creates a cliff edge for properties just above £625,000, while 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. Some commentators criticised the 2025 end date, saying it would leave first-time buyers significantly worse off¹.

What happens next

The Bill moved to the House of Lords after 10 January 2023 and received Royal Assent on 8 February 2023¹. The relief is scheduled to end on 31 March 2025¹. No further parliamentary stages on this Act have been reported. For background on buying a home, see the home-buying hub.