Property Taxation
Higher Rates on Additional Dwellings (HRAD)
HRAD is a surcharge on the normal rates of Stamp Duty Land Tax (SDLT) that applies to the purchase of a residential property for more than £40,000 by someone who already owns an interest in such a property, unless they are replacing their main residence. From 31 October 2024, the surcharge increases from 3% to 5%. For example, at present there is no SDLT on the purchase of a single dwelling for up to £250,000, but if the purchaser already has an interest in a dwelling, the HRAD applies to make the charge 5%.
Where someone buys a new home before they have sold their existing residence, it is possible to claim the surcharge back if the sale of the old house is completed within 3 years (as long as that leaves the individual with only one dwelling).
Rate of SDLT
A temporary reduction in the normal SDLT rates expires on 31 March 2025. Up to that date, the first £250,000 is charged at nil; from 1 April 2025, the band from £125,001 to £250,000 will once again be charged at 2%. There is also a reduction in the thresholds for first-time buyer relief: from 1 April 2026, the nil rate will apply to the first £300,000 of a property costing up to £500,000, down from the first £425,000 of a property costing up to £625,000.
The higher rate of SDLT that applies to certain purchases of residential property costing over £500,000 by companies increases from 15% to 17% on 31 October 2024.
Annual Tax on Enveloped Dwellings (ATED)
ATED applies to residential property worth above £500,000 that is owned through companies and other corporate structures, unless the situation qualifies for a relief. The rates increase automatically each year with inflation and will rise by 1.7% from 1 April 2025, in line with the September 2024 Consumer Prices Index.