Stamp Duty Changes from April 2025: What You Need to Know

This is a call to anyone who is in the process of purchasing a home to ensure they are aware that come April 1, 2025, we’ll see some pivotal changes to the UK’s Stamp Duty Land Tax (SDLT) rules. These adjustments will have a significant impact on property buyers and sellers alike, so it’s worth ensuring all parties are aware of the deadlines.

What’s Changing?

The temporary SDLT relief, first introduced back in September 2022, is set to expire on March 31, 2025. Here’s what the landscape will look like from April 1:

For Standard Residential Purchases

• The nil-rate threshold drops from £250,000 to £125,000.
• SDLT rates will revert to:
  • 0% on the first £125,000
  • 2% on the portion between £125,001 and £250,000
  • 5% from £250,001 to £925,000
  • 10% from £925,001 to £1.5 million
  • 12% on anything above £1.5 million.

For First-Time Buyers

• The nil-rate threshold decreases from £425,000 to £300,000.
• SDLT rates for first-time buyers will be:
  • 0% on the first £300,000
  • 5% on the portion between £300,001 and £500,000
  • No relief for properties priced over £500,000
• To put this into perspective, a first-time buyer purchasing a property for £400,000 after the deadline could face £5,000 in SDLT—a sharp contrast to paying nothing if they complete beforehand.

How This Affects Buyers and Sellers

Rising Costs:

•  First-time buyers may feel the pinch more acutely due to the reduced nil-rate band.
• Those completing purchases post-March 2025 could face higher SDLT bills.
• Expect a flurry of activity leading up to March 31, 2025, as buyers race to lock in the current rates.
• Increased demand could nudge house prices upward and create fierce competition.
• Conveyancing Bottlenecks:
• The rush to beat the deadline might overwhelm conveyancers, leading to potential delays. Timing will be crucial.

Market Surge:

• Expect a flurry of activity leading up to March 31, 2025, as buyers race to lock in the current rates. Increased demand could nudge house prices upwards and create fierce competition.
• Increased demand could nudge house prices upwards and create fierce competition.

Conveyancing Bottlenecks:

• The rush to beat the deadline might overwhelm conveyancers, leading to potential delays. Timing will be crucial.

Your Next Steps

If you’re planning to buy or sell, here are some tips to stay ahead of the curve:

•Act Now: Begin your property search and secure financing sooner rather than later. Engaging a trusted mortgage adviser and conveyancer early will save you stress down the line.

•Budget Carefully: Account for the SDLT changes when crunching the numbers. First-time buyers, in particular, should revisit affordability calculations to avoid nasty surprises.

•Seek Expert Advice: A good mortgage broker (we at Coreco come to mind!) can help you navigate the complexities and find the best solutions for your needs.

With these upcoming SDLT changes, preparation will be key to avoiding unnecessary costs and hassle. Whether you’re buying your first home, moving up the ladder, or looking to sell, being proactive now could save you a small fortune down the line.

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