Stamp Duty

• From the 1^st April, the SDLT nil rate band threshold will fall from £250,000 to £125,000 (returning to 23 September 2022 rates) and SDLT will (as before that date) be chargeable at 2% (or where the higher rate on additional dwellings and/or non-UK resident surcharge applies, an additional 2%) on the difference.
• First time buyer’s relief will only be available where the purchase price of the property does not exceed £500,000 (down from the current cap of £625,000); and the current £425,000 nil rate band first-time buyer’s relief threshold will fall back to £300,000 (with the difference being chargeable to SDLT at 5%).

Leasehold and Freehold Reform Act 2024

• On 31^st January, the Leasehold and Freehold Reform Act 2024 (Commencement No 2 and Transitional Provision) Regulations 2025 (SI/2025/57) came into force. Previously, leaseholders had to own their property for two years (known as the “qualifying period”) before they could extend their lease or purchase the freehold of their property. This is no longer applicable. The change applies retrospectively, meaning that it is not limited to leases granted after 31 January 2025. Housing Minister Matthew Pennycook has stated that this is an initial step towards the overhaul of the leasehold system and that the Labour government will continue to implement the measures set out in the Leasehold and Reform Act 2024.
• There will be further consultations in 2025 regarding service charges and costs, valuation rates for enfranchisement and commonhold.

The Renters’ Rights Bill

• Regulated providers of social housing will be affected by the following changes:
• – The end of assured shorthold and fixed term tenancies
• – Tenancies over 7 years won’t be assured tenancies.
• There will be further changes to the grounds for possession.

It is clear that 2025 is going to be a busy year for legal practitioners and property stakeholders with the Government seemingly serious about initiating a series of changes, some of which will be quite radical.

Please contact our expert Property Lawyers for assistance with any Residential Conveyancing enquiries.

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After the much-anticipated recent Labour budget, increases in stamp duty land tax (SDLT) for non-primary residences were announced. The higher rate for additional properties was raised from 3% to 5% with effect from 31^st October 2024 (although most contracts exchanged in advance should not be affected by the increase). The government hopes that the move will help free up housing stock for first-time buyers and movers without an additional property.

The single rate of SDLT payable by companies purchasing dwellings over £500,000 was also increased, from 15% to 17% (again, from 31^st October 2024).

From 1st April 2025, there will be further changes coming into effect in terms of changes to the Stamp Duty Bands (thresholds) :

• The nil rate threshold which is currently £250,000 will return to the previous level of £125,000.
• The nil rate threshold for first-time buyers which is currently £425,000 will return to the previous level of £300,000.

These measures are likely to affect those looking to invest in rental properties. This is further to the reforms set out in the recent Renters’ Rights Bill, with the abolition of “no fault” evictions and limits on rent increases amongst the proposed reforms.

Capital Gains Tax

Despite much speculation around capital gains tax (CGT), rates for residential property remain unchanged. Adding further to the tax burden was perhaps considered a step too far for the sector if coupled with the SDLT increases discussed above.

Our experienced Residential Conveyancing team are here to help.

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MDR is a Stamp Duty tax relief regime that can apply to both individuals and businesses buying more than one dwelling in one transaction. It allows purchasers to calculate the tax based on the average value of the dwellings purchased as opposed to their aggregate value. This has been a valuable tax saving for purchases buying larger residential properties with a separate annex, sometimes including a so-called “granny flat” (assuming that all of the relevant conditions for MDR were satisfied in the particular case), however it is now being scrapped after perceived abuse.

The abolition follows an HMRC consultation in 2022. The rules for mixed-use properties were also looked at (i.e. those with both residential and non-residential elements) however the Government has decided not to make any changes to the current legislative rules.

One of the reasons for the abolition of MDR is that the Government has also concluded that it only had a minimal impact on the housing supply overall and that the relief no longer achieves its original aims. Another, probably more significant, reason is that the abolition is expected to raise £220 million in 2025/26 and over £300 million in subsequent years.

It should be noted that contracts that were exchanged before 6 March 2024 will remain eligible for the relief regardless of when completion occurs, provided that there is no variation of the contract.

In conclusion, removing MDR will provide clarity for buyers (and lawyers) and will simplify Stamp Duty calculations. Property lawyers are unlikely to shed a tear over its demise, particularly as an industry of ‘SDLT reclaim agents’ emerged, akin to the Stamp Duty equivalent of ambulance chasers, as a result of the relief being rarely clear cut. They often contacted buyers after completion, suggesting that MDR could be claimed as part of the property constituting a separate dwelling, leading to spurious “granny flat” claims. However, it is worth bearing in mind that there is no statutory definition of “suitable for use as a single dwelling” and this ultimately meant that buyers could not always be certain as to whether they had a valid claim for MDR or not.

For further advice on this MDR matters, or any property related legal advice, please contact our experienced Residential Conveyancing team.

Article written by Property Solicitor Ben James.

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The first change was to increase the price at which SDLT becomes payable.  Prior to 23^rd September 2022, the figure was £125,000.00, which was increased by the Chancellor to £250,000.00.  Accordingly, and so long as only the standard rate of SDLT is applicable, a purchaser will pay no SDLT at all if they purchase for £250,000.00 or less.  The bands are now as follows:

            Up to £250,000.00                                          0%

            From £250,001.00 to £925,000.00               5%

            From £925,001.00 to £1,500,000.00            10%

            Over £1,500,000.00                                        12%

The Chancellor also raised the price at which SDLT becomes payable for first-time buyers, from £300,000.00 to £425,000.00.  The ‘first-time buyer’ relief is now applicable on properties with a value of up to £625,000.00 which is an increase from £500,000.00.  That said it is still a requirement that the property is to be the first-time buyer’s main residence.

Given the cost of living crisis which is exacerbated by increasing interest rates, whilst the changes to SDLT are permanent and welcomed, time will tell as to whether they assist in keeping the housing market moving.

For further information, please contact our friendly Conveyancing team on 024 76531532 or enquiries@bttj.com, who will be happy to help.

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There are many reasons why our clients wish to do this:

1. Marriage
   1. When two people get married/cohabit and already own a property, they may wish for the property to be held in joint names

1. Divorce and separation
   1. Following a divorce, the parties may wish to transfer a jointly owned property into the sole name of one party

1. Tax Planning
   1. Property owners are sometimes advised by tax planners to transfer a share in a family home into the name of their child or other family member
   2. This may be deemed in law as a gift

Whatever the reason, the process is extremely straightforward and something we would be happy to assist with.

Tax and Stamp Duty

Undertaking transfers of equity can have tax implications for you and those involved.

Some transfers will be considered a ‘gift’ or a ‘transaction at under value’. Depending on the value of a share in the property there may be stamp duty to pay, but some transfers of equity are exempt: for instance where a property is being transferred as a gift or result of a court order following divorce proceedings.

There may also be Capital Gains Tax implications on a transfer or disposition. We are not tax advisors, but may be able to help or at least refer you to an accountant for further advice.

Process:

1. Obtain title deeds
2. Prepare a transfer for parties to sign
3. Notify third parties who have an interest in the property, e.g. mortgage lenders
4. Assess whether stamp duty is payable
5. Complete stamp duty land tax form if applicable
6. Register transfer with land registry and pay applicable land registry fee.
7. Send a copy of the new title documents to client.

Please contact us on 02476 531532 if you wish for us to assist you with your transfer or any other conveyancing matter.

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