The recent 2024 budget brought a few significant changes to Stamp Duty Land Tax (SDLT) that affect anyone looking to buy property in Northern Ireland, especially second homes or investment properties.
Ciara Christie, Senior Associate, in the Property Department at Turley Legal provides a summary below of what’s new, what’s staying the same, and what it means for buyers and investors.
Higher SDLT for Second Homes and Investment Properties
One of the most notable changes is an increase in the SDLT rate for those buying additional properties or those purchasing property in a company name, such as second homes or buy-to-let investment properties. This is an increase of 2% to a 5% surcharge now payable on the purchase price.
While it means higher costs for those buying additional properties, what we may see is an opportunity for first-time buyers in the property market.
For example, to purchase an additional property at £150,000.00:
- Pre-budget (30 October 2024), the SDLT would have cost a buyer/company £4,500.00;
- Post-budget (31 October 2024), the SDLT would cost a buyer/company £7,500.00.
Where contracts are exchanged prior to 31 October 2024 but complete or are substantially performed on or after that date, transitional rules may apply.
The government will also increase the single rate of SDLT payable by companies and non-natural persons acquiring dwellings for more than £500,000, from 15% to 17%.
Transitional Arrangements for Those Already in Contract
Understanding that some buyers were already in the process of purchasing a second home or investment property before the new rates were announced, the government has allowed for some transitional arrangements.
For example,
- if a buyer enters into a contract to purchase an additional dwelling (or a company enters into a contract to purchase a dwelling) before 31 October 2024 and completes before 1 April 2025 the buyer will pay SDLT at the pre-31 October 2024 rate of 3% above the standard residential rate;
- if a buyer enters into a contract to purchase an additional dwelling (or a company enters into a contract to purchase a dwelling) on or after 31 October 2024 and completion takes place before 1 April 2025 the buyer will pay SDLT at the new higher rate from 31 October 2024 being a rate of 5% above the standard residential rate.
The End of the SDLT Holiday for First-Time Buyers
As part of the post-pandemic relief measures, first-time buyers have been benefiting from an SDLT holiday, which has offered first-time buyers’ relief from paying any SDLT on property up to the value of £425,000.00. However, this SDLT holiday is set to end on 31 March 2025, meaning first-time buyers will soon face standard SDLT rates. This change might encourage first-time buyers to accelerate their purchases to take advantage of this relief before it expires.
What This Means for Property Buyers and Investors
In summary:
- Second home and buy-to-let buyers: be prepared for higher SDLT rates unless you already have a contract in place, in which case transitional arrangements may come in to play to ease the financial pressure.
- First-time buyers: consider moving quickly to take advantage of the SDLT holiday before it ends on 31 March 2025.
How can Turley Legal help?
The Property Department at Turley Legal is ready to guide you through these SDLT changes, whether you’re a first-time buyer, an investor, or a company acquiring property. With a team experienced in navigating complex SDLT regulations, Turley Legal provide personalised advice to help you understand how these new rates apply to your transaction. The property team will work with you to explore any available reliefs, ensure compliance, and maximise your property investment. For more information or to discuss how Turley Legal can support your property journey, please get in touch.
Ciara Christie
Senior Associate at Turley Legal
T: 028 9544 2470
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