We wish to inform you of significant changes to the Stamp Duty Land Tax (SDLT) that will take effect from April 1, 2025. These adjustments will impact property purchases in England and Northern Ireland. Here’s what you need to know:
1. Standard Residential Property Purchases:
- Current Threshold (until March 31, 2025): No SDLT is payable on properties priced up to £250,000.
- New Threshold (from April 1, 2025): The zero-rate threshold will decrease to £125,000. This means that properties costing £125,000 or more will now incur SDLT, whereas currently, only properties priced above £250,000 are subject to the tax.
2. First-Time Buyers:
- Current Relief (until March 31, 2025): First-time buyers pay no SDLT on purchases up to £425,000, with a maximum property price eligible for relief at £625,000.
- New Relief (from April 1, 2025): The SDLT-free threshold for first-time buyers will reduce to £300,000, with the maximum property price eligible for relief decreasing to £500,000. This means that first-time buyers in the £300,000 - £425,000 price range will start paying SDLT for the first time, and those purchasing homes between £500,000 and £625,000 will no longer qualify for first-time buyer relief.
Implications:
- Increased Costs: Approximately 83% of homebuyers will pay more SDLT from April 2025, up from 49% today. The return of the 2% rate will hit existing owners looking to move and buy a home in the £125,000 to £250,000 price range, where a third of buyers are currently searching.
- Market Impact: These changes are likely to take 0.5 to 1% off house price growth in 2025, hitting buyers in higher value markets and reinforcing a north-south divide for price growth.
Recommendations:
- For Prospective Buyers: If you’re considering purchasing a property, it may be beneficial to complete your transaction before March 31, 2025, to take advantage of the current SDLT rates and reliefs.
- For First-Time Buyers: Assess your budget and property options in light of the new thresholds to understand how these changes may affect your purchasing power.
At A & F Property, we are committed to guiding you through these changes. If you have any questions or need assistance with your property plans, please don’t hesitate to contact us.
