What is happening with Stamp Duty?
When you buy a house in England and Northern Ireland, one of the key costs to consider is Stamp Duty. In this article, we look at what is happening with Stamp Duty and how it might impact you if you are looking to buy a home.
What will the changes to Stamp Duty mean for the housing market?
To what extent these changes to Stamp Duty Land Tax (SDLT) impact the market remain to be seen. Nationwide have predicted that there will be a home buying rush over the few months as people look to complete on their purchases before March 2025**.
While the department of Fiscal Studies have warned that increased Stamp Duty for Landlords will only lead to costs being passed onto renters***. And there are worries that Landlords might exit the market due to increasing costs.
What is happening with Stamp Duty?
There are some key changes coming up with regards to the Stamp Duty levy for both First Time Buyers, Home Movers and Buy to Let investors. To see how much stamp duty you would currently pay on a property, you can use the Governments online calculator: https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#!/intro
First Time Buyers
The Government wants to support First Time Buyers, so after April 2025 there continues to be a discount on Stamp Duty for First Time Buyers. But the level of discount will significantly reduce.
From 1st April 2025, the First Time Buyer level for no SDLT goes down from £425,000 to £300,000. First Time Buyers will then pay 5% Stamp Duty on the portion from £301,001 to £500,000. There is no stamp duty relief over £500,000 for First Time Buyers.
Home Movers
If you have owned a property before or are moving house, the amount you pay on Stamp Duty depends on the purchase price for the property. There are certain thresholds for how much you pay and after April 2025 the threshold where you pay no Stamp Duty is going down to £125,000. The thresholds are as follows:
- The zero SDLT level is changing from £250,000 to £125,000 in April 2025
- The 5% SDLT level remains the same (from £250,001 to £925,000)
- The 10% SDLT level remains the same (from £925,001 to £1.5million)
- The 12% SDLT level remains the same over 1.5 million
Buy to Let Investors
In the Autumn Budget, the Chancellor increased Stamp Duty charges for second home purchases from 3% to 5%. It means that landlords will pay £7,000 more on average extra per purchase compared to those buying their main residence*.
The Government’s aim with this increase is to support First Time Buyers by giving them an advantage over second-home buyers and landlords. But this was a disappointing increase for property investors who have already felt the squeeze over the last few years with higher interest rates and changing regulation.
If you are thinking about purchasing a property and you are wondering what the Stamp Duty changes mean for you why not get in touch? We have contacts across the market, including specialist tax advisers to help you with your purchase. We also have knowledge of all the Government schemes designed to give you a helping hand.
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**Source : https://www.bbc.co.uk/news/articles/cq52z84v0gyo
***Source : https://www.bbc.co.uk/news/articles/c89v7ednx8zo