As we approach March 2025, homebuyers in England are bracing for a significant increase in stamp duty land tax (SDLT). The reversion to previous levels will see the average stamp duty bill for a typical home rise from £2,169 to £4,669, based on the current average price of £293,299. This change is expected to impact many buyers, especially first-time buyers, who will see their threshold drop from £425,000 to £300,000.
Understanding the Changes
From March 2025, the stamp duty rates will revert to their previous levels, which means higher costs for homebuyers. Here’s a quick breakdown of what to expect:
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Current Rates (until March 2025):
- Up to £250,000: 0%
- £250,001 – £925,000: 5%
- £925,001 – £1.5 million: 10%
- Above £1.5 million: 12%
- First-time buyers: Up to £425,000: 0%
-
New Rates (from March 2025):
- Up to £125,000: 0%
- £125,001 – £250,000: 2%
- £250,001 – £925,000: 5%
- £925,001 – £1.5 million: 10%
- Above £1.5 million: 12%
- First-time buyers: Up to £300,000: 0%
The Impact on Homebuyers
The increase in stamp duty will undoubtedly be seen as an unwelcome additional cost by many buyers. Tim Bannister, a property expert at Rightmove, noted that this change will likely lead to a rush to complete transactions before the new rates take effect, resulting in a busier housing market in late 2024.
Examples of the Impact
To illustrate the impact of these changes, consider the following examples:
- For a £450,000 property:
- Current Stamp Duty for First-Time Buyers: £1,250
- Stamp Duty from April 1, 2025: £7,500
- For a £625,000 property:
- Current Stamp Duty for First-Time Buyers: £10,000
- Stamp Duty from April 1, 2025: £21,250
These examples highlight the substantial increase in costs that buyers will face once the new rates are in effect.
Tips to Save on Stamp Duty
- Complete Transactions Early: If you’re planning to buy a home, aim to complete your purchase before March 2025 to take advantage of the current lower rates.
- Seek Professional Advice: Consult with a property expert or financial advisor to explore all possible avenues for reducing your stamp duty liability.