Significant changes to Stamp Duty Land Tax (SDLT) are scheduled for April 2025, affecting both first-time and subsequent home buyers in England and Northern Ireland.

This article contains information on the changes and explains what it could mean for you, especially as a first time buyer.

Reversion of Stamp Duty thresholds

The temporary SDLT thresholds, introduced to stimulate the housing market, will revert to their previous levels on 31 March 2025.

First-time buyers

The current SDLT exemption for properties up to £425,000 will decrease to £300,000. Purchases between £300,001 and £500,000 will incur a 5% SDLT rate on the amount exceeding £300,000. Properties over £500,000 will be subject to standard rates without relief.

Other buyers

The SDLT-free threshold will revert from £250,000 to £125,000. Properties priced between £125,001 and £250,000 will attract a 2% rate, and those above £250,000 will follow the standard rate structure.

Impact of Stamp Duty changes on home buyers

These changes are expected to significantly affect buyers, particularly in regions with higher property values such as London and the South East. For example, a first-time buyer in London purchasing a property at the average price of £480,040 will face an SDLT increase from £2,752 to £9,002 - a difference of £6,250.

Market response

Anticipation of these changes has led to increased market activity, with many buyers aiming to complete transactions before the new rates take effect. Recent data indicates a 25% rise in house sales during September 2024, the sharpest increase since spring 2012, attributed to lower mortgage rates and potentially the impending SDLT revisions.

Additional surcharge on second homes

In addition to the threshold changes, the government has announced an increase in the SDLT surcharge for second homes and buy-to-let properties. Effective from April 2025, the surcharge will rise by 2 percentage points, bringing it to 5%. This adjustment aims to support first-time buyers by reducing competition from investors.

Recommendations for home buyers

Prospective buyers might wish to consider these changes in their financial planning:

• Completing property purchases before 31 March 2025 could result in substantial tax savings
• Consulting with a whole of market mortgage broker can provide personalised advice tailored to individual circumstances.

If you'd like to take advice from a whole of market mortgage advisor with decades of experience in this area, please get in touch with me today.

Call me, Marc, on 01865 390490 to talk specifics.