Understanding Stamp Duty and The Upcoming Changes 

If you’re considering buying a home, understanding Stamp Duty is crucial. In this post, we’ll explore what Stamp Duty is, the upcoming changes set for March 2025 and why now is the perfect time to make your move. 

What is Stamp Duty? 

Stamp Duty Land Tax, or SDLT, is a tax you pay when you buy a property or land over a certain price in England and Northern Ireland. It’s a one-time payment made upon completion of the purchase. 

The amount of Stamp Duty you pay depends on the price of the property and your buyer status. For example, first-time buyers currently benefit from higher thresholds before they start paying Stamp Duty. But this is set to change soon. 

Right now, if you’re a first-time buyer, you don’t pay any Stamp Duty on properties up to £425,000. For properties between £425,001 and £625,000, you pay 5% on the amount over £425,000. However, from 1^st April 2025, these thresholds will revert to their previous levels. You’ll only get relief on properties up to £300,000, and the maximum property price eligible for relief will drop to £500,000. 

The zero-rate threshold for main residences will decrease from £250,000 to £125,000.

So, what does this mean for you? 

If you’re planning to buy a home, especially as a first-time buyer, purchasing before April 2025 could save you thousands of pounds. For instance, buying a £400,000 home now means you pay no Stamp Duty. After March 2025, you’d pay £5,000.

If you’re moving into a bigger home, and it will be your sole residence, the SDLT will change for you too from March 25. If you complete on a property with a purchase price of £600,000 before 31/03/25 you’ll pay £17,500, however if you complete after 01/04/25, you’ll pay £20,000 in SDLT. 

Stamp Duty isn’t just for first-time buyers. If you’re buying a second home or an investment property, the rates are higher. Currently, you pay 3% on the first £250,000, 8% on the portion from £250,001 to £925,000, and so on. These rates will also increase after March 2025. 

Who needs to pay Stamp Duty? 

Generally, anyone buying a property or land over the threshold. This includes individuals, companies, and non-UK residents. The tax is calculated based on the purchase price and must be paid within 14 days of completing the purchase. 

To summarise, if you’re thinking about buying a home, now is a great time to do it. The current Stamp Duty reliefs are generous, but they won’t last forever. By acting before 30^th March 2025, you can take advantage of these savings and make your dream home more affordable. 

If you have any questions about stamp duty, or about buying a home in general, feel free to reach out to one of our Sales Advisors at Stonebridge and we’ll be happy to help.