Act Now to Save Thousands: Stamp Duty Changes Coming in 2025
If you’re considering buying a home or investment property, now is the time to act. Changes to the Stamp Duty Land Tax (SDLT) thresholds are set to take effect on 1 April 2025, potentially costing buyers thousands of pounds more in tax. Here’s what you need to know about the changes, the benefits of acting early, and how they could impact your next move.
What Is Stamp Duty?
Stamp Duty is a tax you pay when purchasing property or land in England and Northern Ireland. The amount you pay depends on the price of the property and your buyer status, such as whether you’re a first-time buyer, moving home, or purchasing an additional property.
Key Changes Coming in 2025
For First-Time Buyers:
Currently, first-time buyers enjoy significant tax relief:
No SDLT on properties up to £425,000.
5% SDLT on the portion from £425,001 to £625,000.
Properties over £625,000 do not qualify for first-time buyer relief.
From 1 April 2025, these thresholds will decrease:
No SDLT on properties up to £300,000.
5% SDLT on the portion from £300,001 to £500,000.
Properties over £500,000 will not qualify for first-time buyer relief.
Example: If you’re buying a £400,000 property as a first-time buyer:
Before 1 April 2025: You pay £0 in SDLT.
From 1 April 2025: You pay £5,000 in SDLT.
For Home Movers:
Currently, home movers benefit from a higher nil-rate band:
No SDLT on the first £250,000.
5% SDLT on the portion from £250,001 to £925,000.
Higher rates apply for more expensive properties.
From 1 April 2025, the thresholds revert to pre-2022 levels:
No SDLT on the first £125,000.
2% SDLT on the portion from £125,001 to £250,000.
5% SDLT on the portion from £250,001 to £925,000.
Example: If you’re buying a £300,000 property:
Before 1 April 2025: You pay £2,500 in SDLT.
From 1 April 2025: You pay £5,000 in SDLT.
For Investors and Second-Home Buyers:
If you’re purchasing an additional property, such as a buy-to-let or holiday home, you’re already subject to higher rates. However, from 31 October 2024, the surcharge on additional properties increases:
Current surcharge: Additional 3% on top of standard SDLT rates.
From 31 October 2024: Additional 5% on top of standard SDLT rates.
Example: If you’re purchasing a £300,000 second home:
Before 31 October 2024: You pay £14,000 in SDLT.
From 31 October 2024: You pay £20,000 in SDLT.
Advantages of Buying Before 31 March 2025
By acting before the changes take effect, buyers can enjoy substantial financial benefits:
First-Time Buyers:
Avoid paying up to £5,000 in additional SDLT by purchasing a home under the current thresholds.
Retain eligibility for the higher nil-rate band of £425,000.
Home Movers:
Benefit from the current nil-rate threshold of £250,000, saving up to £2,500 compared to post-2025 rates.
Investors and Second-Home Buyers:
Complete purchases before 31 October 2024 to avoid the higher 5% surcharge, saving thousands on investment properties.
Overall Market Savings:
Buyers of properties valued between £300,000 and £425,000 could see the most significant savings by avoiding higher SDLT rates.
Steps to Take
Start Early: Property transactions can take months to complete. Begin your search and conveyancing process now to ensure you meet the deadlines.
Seek Advice: Speak to a financial advisor or property expert to understand how these changes apply to your situation.
Work with Professionals: Use reputable estate agents and conveyancers to streamline your transaction and avoid delays.
Conclusion
With the Stamp Duty changes looming, now is the perfect time to make your move. Whether you’re a first-time buyer, upgrading to a new home, or investing in property, acting before these deadlines could save you thousands. Don’t wait—start planning your move today.
