What changes to SDLT have been announced?

Chancellor’s statement on 23 September

On 23 September the then Chancellor Kwasi Kwarteng announced three changes to SDLT:

• an increase in the threshold up to which SDLT is not paid – the ‘nil-rate threshold’ – from £125,000 to £250,000.
• an increase in the nil-rate threshold for first-time buyers relief, from £300,000 to £425,000
• an increase in the maximum amount first-time buyers can buy a house for and still be eligible for relief, from £500,000 to £625,000.

The then Chancellor confirmed these changes were a permanent cut to SDLT, effective immediately.

Chancellor’s statement on 17 October

On 17 October the Chancellor Jeremy Hunt set out a series of changes to the Government’s fiscal plans. Mr Hunt confirmed the changes to SDLT thresholds that had been announced the previous month would remain in place.

Chancellor’s Autumn Statement on 17 November

On 17 November the Chancellor presented his Autumn Statement. As part of this Mr Hunt announced that the changes to SDLT thresholds would be temporary, and would remain in place until 31 March 2025.

How are these measures implemented?

Temporary implementation from 23 September

On 23 September the House of Commons approved a ‘Provisional Collection of Taxes Motion’ (PDF) to give immediate effect to these changes. This motion has temporary effect.

There is precedent for this approach: in July 2020 the Government introduced a temporary increase in the SDLT nil-rate (0%) band for residential property, as part of its response to the Covid-19 pandemic. Provision for this tax cut was made in a similar ‘stand alone’ Bill, though in this case the Bill completed all of its stages on the same day. The Commons Library briefing  Stamp Duty Land Tax (Temporary Relief) Bill 2019‑21 provides further details.

Permanent implementation with the Bill

It is necessary for the Government to introduce legislation to give these changes permanent effect. The Stamp Duty Land Tax (Reduction) Bill 2022-23 would do this. The Bill was introduced on 24 October 2022, and had its second reading on that day. A date for the Bill’s remaining stages in the House of Commons has not been announced as yet.

HMRC has published an impact assessment on these changes to SDLT thresholds. This observes that the Government had not consulted on this measure because “this is a change which is wholly relieving.” It notes that “it would not be in the public interest to consult, as this may have an adverse effect on the housing market if buyers delayed purchases during the consultation period.”

As part of the Autumn Statement 2022 the Government has stated that it will amend the Stamp Duty Land Tax (Reduction) Bill to provide that the changes to SDLT thresholds are temporary, and remain in place until 31 March 2025. HMRC has published an impact assessment of this change. It is estimated that the temporary increase in SDLT thresholds will cost £775 million in 2022/23, rising to £1,180 million in 2023/24 (for details see, Autumn Statement, CP 751, November 2022