Have a question? Call us on 0800 1979 345
Have a question? Call us on 0800 1979 345
This article was published on January 9th, 2025
The dramatic changes to stamp duty land tax (SDLT) coming into force will inevitably impact couples who are looking to move out of their shared property after separating.
Not only have we seen a rise in separated couples continuing to live together due to the cost-of-living crisis, this figure will continue to increase as the changes to SDLT require them to live together for longer to acquire more savings to purchase their own home.
As of 1st April, the SDLT threshold will reduce from £250,000 to £125,000 for buyers who have previously owned a property*. If either party is looking to purchase a property over £125,000 they will be liable to pay a higher amount in tax than they would if they purchased the property before 31st March.
*For first-time buyers, the threshold will decrease from £425,000 to £300,000.
| Purchase Price | Tax Payable |
|---|---|
| £0 - £250,000 | 0% |
| £250,000 - £925,000 | 5% |
| £925,000 - £1.5 million | 10% |
| Above £1.5 million | 12% |
£0 – £250,000 = £0
£250,000 – £400,000 = £7,500
TOTAL SDLT due £7,500
| Purchase Price | Tax Payable |
|---|---|
| £0 - £125,000 | 0% |
| £125,000 - £250,000 | 2% |
| £250,000 - £925,000 | 5% |
| £925,000 - £1.5 million | 10% |
| Above £1.5 million | 12% |
£0 – £125,000 – £0
£125,000 – £250,000 = £2,500 due
£250,000 – £400,00 = £7,500 due
TOTAL SDLT due £10,000
As demonstrated above, the changes will make it significantly more challenging for individuals to purchase a property after separation. Consideration will need to be afforded during discussions on matrimonial finances, and a more detailed assessment will be required when assessing the housing needs and affordability of both parties.
This is certainly going to create more pressure on couples who are going through separation. Not only has it already become harder for parties to raise a deposit and save additionally for household contents and furnishings due to the cost-of-living crisis, but the increase in SDLT will make this even more difficult to achieve.
It is important to understand that those who are married have legislative rights when it comes to the division of the equity in the family home, amongst other capital and assets that may enable the parties to purchase a property of their own. That being said, those who are not married should also seek advice as to the division of equity held in the property that they co-own with their ex-partner.
If you and your partner are going through a separation, you must obtain initial advice as soon as possible from one of our highly experienced family solicitors. Our family team will provide you with the knowledge and guidance you need to support you throughout your separation.
Please contact one of our family solicitors today for your FREE initial telephone consultation on 01625 503444 or fill out our simple enquiry form below.
