Upcoming Changes to Stamp Duty Relief: What Home Movers Need to Know.
Aleka Gutzmore
Award Winning Financial Advisor | Business Development Manager | Driving Growth in Financial Services | Community Organiser
If you're planning a move in 2025, mark an important date in your calendar: Monday, 31 March 2025. This is the day when the current stamp duty relief ends, and the thresholds for Stamp Duty Land Tax (SDLT) in England and Northern Ireland will revert to previous levels.
You may ask what this means for your house move and how much stamp duty you will need to pay. Please keep reading to ensure you're fully informed before making any decisions.
What is Stamp Duty?
If you haven't moved house in recent years, you might need a quick reminder about stamp duty. Stamp Duty Land Tax (SDLT) is the tax you pay when you purchase property or land in the UK. The amount you pay depends on the property's value, with different bands based on the purchase price.
It's also worth noting that stamp duty can vary depending on whether the property is a second home or additional property and the location where you buy it. In Scotland and Wales, for example, the devolved governments have set their own rules and rates.
Current Stamp Duty Rates
Currently, thanks to the stamp duty relief introduced as part of the UK Government's mini-budget, buyers in England and Northern Ireland benefit from increased thresholds.
This relief, which raised the threshold from ￡125,000 to ￡250,000, has significantly reduced the upfront costs for many first-time buyers and homeowners moving up the property ladder.
How Will Stamp Duty Change After March 2025?
From 1st April 2025, the stamp duty relief introduced in the mini-budget will come to an end. The thresholds will revert to pre-mini-budget levels, meaning that stamp duty will once again be payable on all properties over ￡125,000.
The rates will be structured as follows:
As a result, a significant proportion of the housing market will be subject to stamp duty once again. Research from Leeds Building Society suggests that 93% of properties currently on the market will become liable for stamp duty after the changes take effect.
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What Does This Mean for Home Movers?
For those moving up the property ladder, the forthcoming change will likely add additional costs to your move. With the average property price in England currently standing at around ￡309,000 (as of September 2024), this shift in stamp duty thresholds will impact many buyers, including those looking to downsize.
For example, a property purchase priced at ￡300,000 before 31st March 2025 would incur a stamp duty charge of ￡2,500. However, after the relief ends, this figure will increase to ￡5,000.
Given the potential for an increase in stamp duty costs, some buyers may look to bring their plans forward in order to complete their transactions before the new rates take effect. However, it's crucial to bear in mind that the process of buying a home can take anywhere from six weeks to six months. As a result, those who wish to finalise their purchases before the relief expires will need to act quickly.
How Can You Prepare?
Staying ahead of changes to stamp duty and other costs associated with moving is essential for making informed decisions. As stamp duty rates change, it's vital to understand the financial implications of your house move entirely.
Mortgage and protection advisers, like myself, are well-placed to guide you through these changes and help you manage any costs involved. Whether you're a first-time buyer, a seasoned mover, or someone considering downsizing, getting the right advice is important to ensure a smooth transition.
To book a consultation or discuss your options, please contact me, Aleka Gutzmore, Mortgage Adviser. I'm here to help you navigate the process with confidence.
Book your appointment today - https://calendly.com/alekagutzmore/financial-hug-1-2-1?month=2023-11
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