SDLT Changes in October 2026 Budget

Lifetime ISA withdrawal charge reduced for first-home purchases above the property price cap

From 29 October 2026, as announced at Budget 2026, a reduced Lifetime ISA withdrawal charge will apply where a first-time buyer withdraws their LISA savings to purchase a property costing more than £450,000.

For these purchases, ISA managers must apply a withdrawal charge of 20%, rather than the usual 25%, to the amount withdrawn. The £450,000 property price cap itself remains unchanged. The 25% charge will continue to apply to other unauthorised withdrawals, known as unlisted withdrawals.

What customers, conveyancers and ISA managers need to do

LISA holders must continue to use the existing house-purchase withdrawal process through their conveyancer. They must complete an Investor Declaration Form and the conveyancer must complete a Conveyancer Declaration Form confirming the property value.

Once the relevant declarations have been received, the ISA manager must:

• deduct the reduced 20% withdrawal charge
• release the LISA funds to the conveyancer;
• retain the charge until HMRC’s systems have been redesigned to collect it. We expect system redesign to be completed in 2027 and will notify LISA managers once this is complete.

The reduced charge applies to eligible withdrawals made on or after 29 October 2026. It does not apply retrospectively. A previous unlisted withdrawal cannot be reinstated into the LISA.

The guidance for LISA investors and ISA managers is being updated to reflect this change. It is supported by the Individual Savings Account (Amendment) (No. 3) Regulations 2026 and an Explanatory Memorandum. The new guidance will be available here in due course: Conveyancers: first time residential purchase with a Lifetime ISA – GOV.UK.

Annual Tax on Enveloped Dwellings (ATED) – uprating of annual charges

The government has announced that the annual chargeable amounts for ATED will be increased by the September CPI figure of 3.5% for the 2027-28 chargeable period. The 2027-28 charges have been published, and the table below sets out the old and the revised charges. 

SDLT Group Relief claw back rules

The government has today announced that it will amend the SDLT group relief rules to ensure that relief is withdrawn as intended when a purchaser leaves a corporate group where the vendor company has been wound up. The changes will be legislated for in Finance Bill 2026-27, but will have effect for transactions with an effective date on or after 29 October 2026 via a resolution under the Provisional Collection of Taxes Act 1968.

More information, including the Tax Information and Impact Note can be found at Stamp Duty Land Tax — group relief  – GOV.UK. Technical guidance will be shared with WTSG in due course.

Sovereign Tax Status Regime – temporary transitional SDLT relief

The government has today published a consultation and will introduce legislation in a future Finance Bill to amend the rules for foreign sovereigns investing in the UK. This will legislate a new sovereign tax status available for states, heads of state and emanations of states, while bringing certain income and gains into direct taxation. Transitional provisions will include a time-limited Stamp Duty Land Tax relief for restructuring of certain existing property holdings which will apply ahead of the reforms taking effect from 1 January 2029.

More information, including the consultation document can be found here.

Local Government Pensions Scheme SDLT relief

The government has introduced a new SDLT relief for the pooling of land and property into Local Government Pension Scheme (LGPS) asset pool companies, following the announcement of the relief at Budget 2025. The relief will apply to acquisitions made by qualifying collective investment vehicles established or managed by LGPS asset pool companies, and will apply to transactions with an effective date on or after 28 October 2026 and before 1 April 2032. Legislation for the relief will be introduced in Finance Bill 2026-27, but will have effect from 28 October 2026 via a resolution under the Provision Collection of Taxes Act 1968.

More information, including the Tax Information and Impact Note can be found at Stamp Duty Land Tax — Local Government Pension Scheme Relief – GOV.UK. Details on how to claim the relief can be found at [insert link]. Technical guidance will be shared with WTSG in due course.

SDLT on Rent – consequential changes following the Renters Rights Act

The government has today confirmed that, as announced in a Written Ministerial Statement on 22 April 2026, it will introduce legislation in Finance Bill 2026-27 to remove SDLT on the rent element of assured tenancies. The legislation will also remove the requirement to file an SDLT return solely because rent is payable under an assured tenancy. The changes will have effect from 1 May 2026.

The legislation also includes transitional provisions for tenancies entered into before 1 May 2026. These preserve the SDLT treatment of the original tenancy, including any SDLT already due, while ensuring that no further SDLT on rent arises as the tenancy continues.

More information, including the Tax Information and Impact Note can be found at Stamp Duty Land Tax — assured tenancies – GOV.UK. Technical guidance will be shared with WTSG in due course.

Abolition of Stamp Duty – pre-2003 land transactions

As part of the abolition of Stamp Duty, legislation will introduce a new process for regularising historic land transactions that were subject to Stamp Duty before the introduction of SDLT in December 2003. Once Stamp Duty is abolished, taxpayers will be able to make a return to HMRC and, once any Stamp Duty, interest and penalties due have been paid, HMRC will issue a certificate confirming that the relevant instrument is treated as duly stamped.

Legislation is contained with new Schedule 19A of Finance Act 2003, which will be introduced in Finance Bill 2026-27 alongside legislation replacing Stamp Duty and Stamp Duty Reserve Tax with the Securities Transfer Tax.

More information on the wider reforms, including the Tax Information and Impact Note, can be found at Modernisation of the Stamp Taxes on Shares framework — Securities Transfer Tax – GOV.UK. More information and guidance on the new process will be shared in due course.

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