Stamp Duty Land Tax (Temporary Relief) Act 2023 receives Royal Assent

The Stamp Duty Land Tax (Temporary Relief) Act 2023 received Royal Assent on 8 February 2023¹. It was introduced in the House of Commons as the Stamp Duty Land Tax (Relief) Bill 2022-23 on 24 October 2022¹. The Act increases a number of thresholds at which Stamp Duty Land Tax in England and Northern Ireland on residential property begins to be paid, reducing the amount of SDLT paid by many house buyers, until 31 March 2025¹. It applies in England and Northern Ireland only¹.

The thresholds changed are set out below¹.

The measures were first announced by then Chancellor Kwasi Kwarteng on 23 September 2022 as permanent reforms, among a number of taxation changes in the Truss Government's Growth Plan¹. They took effect immediately after the House approved a Provisional Collection of Taxes Motion under the Provisional Collection of Taxes Act 1968¹. During the Autumn Statement on 17 November 2022, Chancellor Jeremy Hunt announced a sunset clause to the SDLT reduction introduced by his predecessor, ending the relief in March 2025¹. To make the reduction temporary, the Government tabled amendments to the Bill before the Committee of the Whole House stage; this, alongside the Bill's third reading, happened on 10 January 2023¹. The Bill was then considered in the House of Lords¹.

SDLT is charged on a "slice" basis, with graduated rates so that more expensive properties face progressively higher rates¹. The amount due depends on factors including the type of property sold, its price, and who the purchaser is¹. 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. Separate property transaction taxes apply in Scotland (Land and Buildings Transaction Tax) and Wales (Land Transaction Tax)¹.

The Institute for Fiscal Studies welcomed the reduction but said the increase to Stamp Duty first-time buyer relief would create a higher cliff-edge for properties falling just beyond the £625,000 threshold¹. The Resolution Foundation also welcomed the measure but said its impact would be uneven, with a majority of the benefit located in London and the South of England¹. The Financial Times quoted property sector experts predicting the measure would not hugely support buyers or the housing market, saying its impact could be overshadowed by higher borrowing and mortgage costs¹.

Why it matters for households

The Act sets the SDLT thresholds that apply to residential purchases in England and Northern Ireland until 31 March 2025¹. Buyers completing in that period pay SDLT only above a £250,000 nil rate band, rather than £125,000¹. First-time buyers have a higher nil rate band of £425,000 and can pay up to £625,000 for a home and still be eligible for relief¹. Because SDLT is charged on a slice basis, the thresholds affect the tax due on the portion of the price within each band¹. Reliefs and exemptions can affect the amount payable, and the tax does not apply in Scotland or Wales, where separate transaction taxes operate¹.

What happens next

The relief ends on 31 March 2025 under the sunset clause announced on 17 November 2022¹. The proposed end of the SDLT holiday on that date was not debated in the House of Commons during the Autumn Statement¹. Following the Autumn Statement, the response to the cut ending in March 2025 was not heavily discussed among industry experts; some said the cut would hopefully result in a stronger start to 2023, others praised the overall package, and others criticised the proposed end, saying it would put first-time buyers in a significantly worse-off position¹.