On 1st April the rates of Stamp Duty Land Tax (SDLT or Stamp Duty) are changing, resulting in buyers paying more for their new homes.
Here’s why the changes could mean buying your first home could cost £5,000 more after the 31st of March.
How does Stamp Duty work?
Stamp Duty is a tax from the government, paid by the buyer in a lump sum upon completion.
Similar to how income tax is calculated, Stamp Duty is charged in bands and the amount you pay is calculated on the part of the property price falling in each band. For example, under the current rules, a property purchased for £400,000 would have no SDLT applied to the first £250,000, and a five per cent tax on the remaining £150,000. In this scenario, you would pay £7,500 in Stamp Duty.
Buyers in England and Northern Ireland will pay Stamp Duty on residential properties costing more than £250,000 unless you are a first-time buyer.
Changes to Stamp Duty from April.
Since 2022, there has been a temporary change to the threshold when you begin paying Stamp Duty to encourage more buyers to take a step onto the property ladder. Currently, for properties worth up to £425,000, first-time buyers do not pay any SDLT, however, from the 1st of April 2025, the threshold will be reduced to £300,000. For properties worth between £300,001 and £500,000 the new rate of SDLT due for eligible first-time buyers will be 5%.
If you aren’t a first-time buyer, the new rates of Stamp Duty will be as follows:
- Up to £125,000 – 0%
- £125,001 – £250,000 – 2%
- £250,001 to £925,000 – 5%
- £925,001 to £1.5 million – 10%
- Over £1.5 million – 12%
How you can take advantage of the current rates.
The current lower rates of Stamp Duty will only apply to buyers who have fully completed their purchase before the 1st of April 2025. This is why it’s important to act now to avoid missing out on significant financial savings.
In the UK currently, the average time for conveyancing to be completed is between 12 and 16 weeks, so if you are preparing to both sell and buy it is critical to act now to avoid missing the deadline for reduced SDLT.
If you are a first-time buyer, the typical time the conveyancing process takes is shorter, and when buying a new-build property directly from us, there is no buying chain which can extend the process.
Across our developments in North Derbyshire and Stocksbridge, we have a range of properties ready for buyers to move straight in. Want to find out more? Get in touch with the sales team today and let us match you with your perfect new home: 01246 575744
