Stamp Duty Change

moobong27

Hi

I am confused on what dates you would need to work by in order to purchase a house at the current threshold of 425k and not pay Stamp Duty... Do you have to have exchanged and completed by the 31st of March, or will it still be valid if you had made an offer and it has been accepted by the 31st March 2025?

Many thanks
Megan

PRAISETHESUN

My understanding is that you need to complete on your sale before the deadline. Making an offer and/or exchanging contracts doesn't matter if the sale doesn't complete before then.

user1977

PRAISETHESUN said:

My understanding is that you need to complete on your sale before the deadline. Making an offer and/or exchanging contracts doesn't matter if the sale doesn't complete before then.

You sure about that? Exchange is usually sufficient for SDLT changes (e.g. the "immediate" Budget changes didn't apply if you had exchanged on or before Budget day), but I haven't looked at the detail.

Bookworm105

in respect of the reversion of the thresholds in March 2025 for normal purchases to the previous levels there are no transition rules in place since that deadline is so far ahead it is assumed there are no purchases currently underway which would be adversely affected by it, ie no one has exchanged yet with a completion date set for at least + 5 months from now. Therefore  the effective date for SDLT on such purchases remains the norm. ie: the date of completion, not date of exchange (or date of offer!)

That is how SDLT has always operated but subject to exceptions linked off here SDLTM07600 - Scope: When is Stamp Duty Land Tax (SDLT) chargeable: Effective date of a transaction FA03/S119 - HMRC internal manual - GOV.UK ). In technical terms completion date is when : the bulk of the money is paid (ie not just the deposit) and/or the purchaser takes possession of the property 




(in respect of the change to the additional rate rules, because those came into effect the day after the budget, there are transitional rules for that which apply to those purchases already underway at date of the budget: "Where contracts have been exchanged before 31 October 2024 but complete on or after the 31 October 2024 the additional rate of 3% will apply instead of 5%") Stamp Duty Land Tax rates: 23 September 2022 to 30 October 2024 - GOV.UK

SDLT_Geek

moobong27 said:

Hi

I am confused on what dates you would need to work by in order to purchase a house at the current threshold of 425k and not pay Stamp Duty... Do you have to have exchanged and completed by the 31st of March, or will it still be valid if you had made an offer and it has been accepted by the 31st March 2025?

Many thanks
Megan

As others have said, it is not a protection to have exchanged contracts before 1 April 2025 if completion is on or after 1 April 2025.  The rules are those that tend to apply at the end of a "holiday" when SDLT rates revert to normal, rather than the rules which apply when an increase in SDLT rates is announced.

The small bit of wriggle room is for a contract which "substantially performs" before 1 April 2025, for example by taking possession or paying all or substantially all of the price.  This is difficult to achieve in practice.