If you’re a landlord in the UK then you’ll likely be aware of the upcoming changes to stamp duty. Stamp duty land tax (SDLT) changes are coming into force from the 1st of April 2025. This blog is all about the stamp duty update: what it means for landlords.
What is stamp duty?
Stamp duty is a fee paid by those who buy properties in the UK. It is not a set fee and the amount you pay will vary depending on many factors. Some factors can include if it’s your first home, if you are purchasing additional property and if you are purchasing a property as an individual or a company. This is not an exhaustive list and other factors may apply.
Home buyers will only pay stamp duty over a certain price bracket, and the property price will determine how much you pay.
What are the new stamp duty tax rates?
From April 2025, home buyers will pay stamp duty on homes over £125,000. Previously the amount was £250,000. As we mentioned previously, these rates will vary if it is an additional home purchase.
First time buyers can claim relief which means they will pay much less or zero per cent depending on the price of the property.
Why are these changes happening?
In 2022, the previous government made temporary stamp duty changes to help people purchase property. However, the stamp duty threshold is now returning to its previous level.
What is the impact on landlords and buy-to-let investments?
Landlords who own multiple homes may face higher stamp duty taxes when they make further property investments. These changes in April 2025 mean that landlords may need to increase rental costs to cover the increased costs of buying additional properties.
Landlords usually have to pay 5% on top of the stamp duty taxes if they purchase additional properties.
Tips for landlords to reduce stamp duty rates
- Purchase the property through a limited company – Having a limited company for your landlord affairs can provide benefits when it comes to stamp duty land tax.
- Renegotiate property prices if possible
- Take time to look at your property portfolio and assess rental yields and ROI in the buy-to-let market
- Look into the local rental market and ensure your rental costs are inline with the market average
What next?
It’s vital that UK landlords take time to understand the new stamp duty land tax changes and what they mean for buy-to-let properties. The increase in stamp duty will come into force on the 1st of April 2025. Any property that is purchased after the 31st of March will be subject to the new rates of stamp duty tax. Landlords should also stay up to date on Capital Gains Tax rates and changes to the Renter’s Rights Bill.
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