Stamp Duty is changing – what does that mean for your limited company?

Stamp Duty Land Tax (SDLT) receipts fell by 24% in the 23/24 tax year, going from £15,360 million in the previous year down to £11,615 million. In the same period, property receipts decreased by 26%, while new lease receipts fell by 9%. 

Those numbers may look a little different in 25/26, since Stamp Duty is changing as of 1 April 2025. But what exactly is changing, and what does the change mean for your business? Read on to find out. 

How is Stamp Duty changing in 2025? 

Here’s how Stamp Duty will change from April 2025 for primary single-residential purchases: 

• Previously, the SDLT rate of zero percent applied to up to the first £250,000 in property value. As of 1 April 2025, the zero percent rate will apply to up to £125,000 

• That difference – the £125,000 to £250,000 amount – will now see a 2% SDLT rate 

• Before 31 March 2025, the portion covering £250,001 up to £925,000 saw a 5% SDLT rate. This will stay the same going forward 

• Similarly, the percentage for the following £575,000 sits at 10%, which won't change moving forward. Anything above £1.5 million is charged at 12%, which will also stay the same from April 2025 on 

Okay, what does that look like as a calculation? 

Let’s say you buy a property valued at £200,000. Before 1 April 2025, you’d be expected to pay £0 stamp duty. After 1 April 2025, you’d pay £1,500, which is 2% of the £75,000 remaining after the zero percent threshold rate, which is now £125,000. 

Disclaimer: this is only a theoretical example. It is not meant to be an accurate depiction. 

To calculate how much Stamp Duty you might have to pay, we recommend using the government’s SDLT calculator. 

For first-time buyers, there was a special first-time buyer discount that meant they could pay zero SDLT on a property purchase not surpassing £425,000. This has now been reduced to £300,000, which means first-time buyers will now have to pay SDLT if the value of the property surpasses £300,000. 

SDLT surcharge rates for second homes, buy-to-lets, and company purchases increased from 3% to 5%. Businesses now pay an additional 5% on residential properties. SDLT is set at 17% for residential properties valued at over £500,000 when purchased by a company, although this can be relieved if the property fits certain criteria, for instance, if the property is occupied by employees of the purchaser. 

What do the Stamp Duty Land Tax changes mean for your business?

Both the 2024 surcharge increase for businesses from 3% to 5% and the reduction for zero SDLT thresholds from £250,000 to £125,000 could have a significant impact on your business, particularly if you work in property development or own and manage buy-to-lets.

Higher rates mean a higher cost of investment, purchase, and moving. This can mean a reduced ability to invest, a reduction in working capital, and a potential impact on profitability and competitiveness. 

Consider assessing your current budgets to ensure they accurately reflect the new rates. This will help prevent any major surprises from occurring. Take a look at your investment strategy and priorities – are you fully able to continue investing at the same rate you had planned. If not, where will your investments be most effective? What will help you drive the most revenue? 

Consider speaking to a tax advisor that works in your industry to ensure you're operating in a tax-efficient way and that you're aware of any reliefs and funds the government offers to help grow small businesses. 

For instance, the 17% rate may not apply to companies buying residential properties while acting as a trustee of a settlement. You can also potentially get relief from this rate if the property is bought by a property trader or developer, if the property is a farmhouse, or if it’s bought by a housing co-operative that qualifies for the correct conditions. 

Also, you may be able to claim Stamp Duty as a business expense, meaning you could be able to lower your corporation tax liability by deducting Stamp Duty from your taxable profits. 

Lastly, reassess your cash flow forecasts to ensure they account for the changes in SDLT rates. This will help you ensure you have enough working capital to operate effectively in the coming year. 

Need help paying Stamp Duty? 

Do the changes mean your Stamp Duty bill will be bigger than expected for any purchases made in the upcoming year? If you’re being impacted by these changes, but were previously unaware of them, you may not have budgeted for this increase. This can leave you with cash flow problems and could even result in a hit to working capital. 

There are several business finance options available that could help smooth out this change. The first option is a secured or unsecured business loan, which is where you receive a cash lump sum which you repay over instalments across a pre-agreed period of time. Another option is a working capital loan, which can help you resolve the cash flow problems this increase could create for your business. 

There are also property-specific loans. For example, you could take out a commercial mortgage or semi-residential mortgage to help you pay Stamp Duty. This would be particularly helpful if your Stamp Duty cost is especially high or if you're hoping to spread the cost over a very long period, such as several decades. 

If you plan to have the money to pay Stamp Duty within the next year – maybe from the sale of another property or from incoming investor funding – but just don’t have the funds right now, a bridging loan could also be suitable. 

To find out if you’re eligible for any of these finance options, submit your information via the link below and we’ll get in touch to let you know if you’re eligible and if so, for how much. 

Find a loan to help pay Stamp Duty.

Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.

It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.

Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.