Stamp Duty Land Tax (Temporary Relief) Act 2023 section 1

Reduction of SDLT on acquisition of residential property

Section 1 introduces temporary reductions to Stamp Duty Land Tax rates for residential property transactions with an effective date between 23 September 2022 and 31 March 2025, covering standard purchases, additional dwellings, residential leases and first-time buyer relief.

• The nil-rate threshold for standard residential purchases is raised from £125,000 to £250,000, with SDLT charged at 5%, 10% and 12% on successive bands above that level.
• For additional dwellings (such as second homes and buy-to-let properties), the 3% surcharge structure is adjusted so the first £250,000 is taxed at 5%, with higher bands at 10%, 15% and 17%.
• First-time buyers benefit from a higher nil-rate band of £425,000 (previously £300,000) and can claim relief on purchases up to £625,000 (previously £500,000), paying 5% only on the amount between £425,000 and £625,000.
• Where a contract was substantially performed during the temporary relief period but completed by conveyance after 31 March 2025, the completion is not treated as a separate transaction merely because the temporary rates no longer apply or because the higher rates introduced by Finance Act 2025 would apply to that conveyance.