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04 March 2025
From 1st April 2025 the temporary increase in the threshold introduced in September 2022 will cease meaning that for some, more Stamp Duty Land Tax (SDLT) will be payable.
SDLT is a tax paid to HMRC by a buyer of a property on completion. The amount of SDLT depends on when a property was purchased, the price paid for a property, the buyer’s individual circumstances and whether or not they are eligible for reliefs or exemptions.
On 1st April 2025 stamp duty rates change. How will this affect you?
For main residential or only residential property purchases:
Completed on or before 31st March 2025 |
Completed on or after 1st April 2025 |
|
£0 - £125,000 |
0% |
0% |
The next £125,000 (£125,001 - £250,000) |
0% |
2% |
The next £675,000 (£250,001 - £925,000) |
5% |
5% |
The next £575,000 (£925,001 - £1.5 million) |
10% |
10% |
The remaining amount (the portion above £1.5 million) |
12% |
12% |
The 5% surcharge remains unaffected. If you own another residential property, there is an additional 5% stamp duty payment to make (essentially for second or third homeowners). Additional charges apply for non-UK residents.
How much more could you pay?
As of 15th January 2025, the average house price in Dorset was £348,000. Currently on the standard rates with no reliefs or exemptions, the current SDLT liability would be £4,900. From 1st April, this will increase to £7,400, which is an increase of £2,500.
Will first-time buyers be affected by the SDLT changes?
First time buyers may feel the increase more. Currently if you are a first-time buyer, you can claim SDLT relief on the first £425,000 of a purchase price. From £425,000 it is 5% payable up to £625,000.
From 1st April 2025, you can claim SDLT relief on the first £300,000 of a purchase price, from £300,000 it is 5% payable up to £500,000.
On the example house price of £348,000, first time buyers currently pay no SDLT but as of 1st April will have to pay £2,400.
Whilst this could be the difference between being able to afford new furniture or electrical appliances in your new home, it is anticipated that this will not be a deal breaker for many. For first time buyers, there are still many government incentives available to assist with the purchase, including Lifetime ISAs and the First Home scheme. The recent base rate cut announced by the Bank of England may also soften the blow with interest rates on some mortgage products reducing.
Should you rush to buy before 31st March 2025?
Our advice is to budget for the higher amount of SDLT when working out your finances for a purchase as it cannot be guaranteed that completion will take place prior to the threshold change.
If you want to discuss how the stamp duty changes will affect you, please speak to one of our residential property team members by calling 0800 652 8373 or by emailing enquiries@battens.co.uk.
