The clock is ticking! Homebuyers have until 31 March, 2025, to complete their property purchase and save thousands before the stamp duty increase takes effect on 1 April 2025. Currently, first-time buyers enjoy a stamp duty exemption up to £425,000, but this threshold will be reduced to £300,000 as the temporary increases introduced in September 2022come to an end.
Starting in April, first-time buyers will go from paying nothing to paying £6,250 in stamp duty on a £425,000 home. This significant shift could make it more challenging for some to get onto the property ladder.
For those moving up the property ladder, the current rate applies a 2% tax on the portion of the property price between £125,001 and £250,000, and 5% on the portion between £250,001 and £925,000. However, these rates will increase significantly after 1 April.
What is Stamp Duty? Stamp Duty Land Tax is a government tax paid by property buyers as a lump sum upon completion. The amount depends on factors such as whether the buyer is a first-time buyer, a UK resident, purchasing as an individual or company, replacing a main residence, or buying additional property.
Why is it Changing? The temporary increases introduced in September 2022 were aimed at supporting the housing market and those looking to get on the property ladder. While initially announced as a permanent change, the increase in the residential nil-rate threshold will end on 31 March 2025.
How is it Changing? From 1 April, 2025, the nil-rate threshold will revert to £125,000 from £250,000. For first-time buyers, the threshold drops from £425,000 to £300,000, with the maximum purchase price for First-Time Buyers Relief reducing from £625,000 to £500,000.
Impact on First-Time Buyers The changes are likely to significantly impact first-time buyers, making it harder for some to afford their first home. From April 2025, they’ll pay 5% stamp duty on properties valued between £300,000 and £500,000.
By acting now, buyers can take advantage of the current rates and potentially save thousands. This not only makes purchasing a home more affordable but also provides an opportunity to secure your dream property before the higher rates kick in.
Don’t wait until it’s too late—start your property search now and complete your purchase by 31 March 2025, to beat the stamp duty rise.
Click here to explore our available properties for sale and take the next step towards your new home today!