SDLTM09845A - SDLT – higher rates for additional dwellings – Transitional rules and the change of rate

The higher rates were increased for transactions with an effective date on or after 31 October 2024. Following the increase, the higher rates are 5 percentage points above the standard residential rates of SDLT.

Contracts entered into before 31 October 2024

Where a contract was entered into on or before 30 October 2024 but completes or is substantially performed after that date, the higher rates will apply to that transaction at the pre-31 October 2024 rate of 3 percentage points above the standard residential rates.

The exceptions to this are where, after 30 October 2024:

• there is any variation of the contract, or assignment of rights under the contract,
• the transaction is effected in consequence of the exercise of any option, right of pre-emption or similar right, or
• there is an assignment, sub-sale or other transaction relating to the whole or part of the subject-matter of the contract, as a result of which a person other than the purchaser under the contract becomes entitled to call for a conveyance
  
  This means that where a contract is entered into before 31 October 2024 and has an effective date between 31 October 2024 and 31 March 2025, the higher rates will apply at a rate 3 percentage points above the temporary residential rates that apply between 23 September 2022 and 31 March 2025.
  
  Where the contract is entered into before 31 October 2024 and has an effective date on or after 1 April, the higher rates will apply at a rate 3 percentage points above the permanent residential rates that apply to transactions from 1 April 2025.
  
  Contracts substantially performed before 31 October 2024
  
  Where a contract which has been entered into and substantially performed later completes, that completion will normally be a notifiable transaction (see SDLTM08000 ).
  
  Where however a contract is substantially performed before 31 October 2024, but completes on or after that date, a land transaction return is not required at completion and no additional tax is chargeable if:

• additional tax would have been chargeable at completion only because of the increase in the higher rate from 3 to 5 percentage points above the temporary rates in force between 23 September 2022 and 31 March 2025, or
• additional tax would have been chargeable at completion only:
• due to the increase in the higher rate from 3 to 5 percentage points above the temporary rates in force between 23 September 2022 and 31 March 2025, and
• as a result of substantial performance taking place and being liable to SDLT in the period between 8 July 2020 to 30 September 2021 during which temporary rates of SDLT were chargeable.

Contracts substantially performed between 31 October 2024 and 31 March 2025

Where a contract is substantially performed between 31 October 2024 and 31 March 2025, but completes on or after 1 April 2025, a land transaction return is not required at completion and no additional tax is chargeable if:

• additional tax would have been chargeable at completion only because of the increase in the higher rates from 3 to 5 percentage points above the permanent rates of tax applying to transactions from 1 April 2025 or
• additional tax would have been chargeable at completion only:
  • due to the increase in the higher rate from 3 to 5 percentage points above the permanent rates of tax applying to transactions from 1 April 2025, and
  • as a result of substantial performance taking place and being liable to SDLT in the period between 31 October 2024 to 31 March 2025 during which temporary rates for SDLT were chargeable.