Chancellor Rachel Reeves’s first budget introduced significant changes to Stamp Duty Land Tax (SDLT), including an announcement that the government intends to lower the stamp duty threshold for residential property transactions.
Changes to SDLT for primary homes won’t come into effect until April 2025, meaning buyers have some time to either complete their current home move or reassess their finances and plan for a future purchase.
Home movers are already subject to rules around stamp duty and when the tax should be paid. Currently, for home movers selling their home to buy their next home, the stamp duty threshold of £250,000 remains in place until April 2025.
The amount of stamp duty paid for residential property purchases for home movers increases as the cost of the property rises:
These bands will remain in place after April 2025, so buyers purchasing homes costing £250,000 or more will notice little impact from the latest budget announcement. However, for homes costing less than £250,000 a new band of stamp duty will be introduced, effectively lowering the threshold of when tax on moving home must be paid.
From April 2025, the stamp duty threshold for home movers will be lowered to £125,000 and a 2% stamp duty will need to be paid on the portion of the property value between £125,000 and £250,000.
Frustratingly for buyers, this means that those with the smallest budgets (and arguably least able to afford further costs) will need to account for stamp duty when moving home.
With the lowering of the stamp duty threshold set for April 2025, most buyers will have time to adjust their finances accordingly by potentially putting aside more money in savings or budgeting to borrow more on their mortgage.
Buyers considering increasing the size of their mortgage should speak with an expert mortgage broker to ensure that they secure the best deal and can keep mortgage repayments affordable.
Finally, if buyers want to avoid paying stamp duty on their purchase altogether, they should consider moving quickly to complete their purchase before the new tax rules come into effect. The average time to move house in the UK is four to six months, so buyers must act now to beat the new SDLT threshold!
As a trusted estate agency with over 40 years of industry experience, Edward Mellor offers fully integrated financial, planning, conveyancing, and surveying services under one roof.
If you are taking the next step along your property journey and are unsure how the rise in SDLT will impact you, our qualified mortgage experts are here to help.
Contact Edward Mellor Mortgages
Related Pages
Changes to Stamp Duty |Stamp Duty – First Time Buyers | News
