As of April 1, 2025, the stamp duty threshold is changing, both in England and Northern Ireland. Regardless of whether you are remortgaging or looking to move, coming to terms with the changes is imperative.
Simply put, the stamp duty threshold has dropped, meaning stamp duty land tax (SDLT) must be paid on properties priced over £125,000, as opposed to those priced over £250,000, as was the case before. First-time buyer relief is also decreasing and will only apply on property sales up to £300,000, as opposed to the previous £425,000 limit. It was concurrently announced that first-time buyers would no longer receive stamp duty relief on property sales costing over £500,000.
While some may assume that the lessening demand will likely lead to more reasonable pricing in certain areas, upfront costs will likely be higher (particularly for properties priced at above £125,000). A reduced market, however, may be of benefit when negotiating with sellers, and knowing the changes upfront will give buyers the foresight to plan ahead, avoid surprises, and plan effectively.
How much Stamp Duty will I have to pay?
The amount of Stamp Duty Land Tax you must pay depends on the value of the property. As of April 1st 2025, for properties, lease premiums or transfer values priced at;
- Between £125,001 to £250,000, the SDLT rate will be 2%.
- For the portion between £250,001 to £925,000, the rate will be 5%.
- For the portion between £925,001 to £1.5 million, the rate will be 10%.
For anything up to £1.5 million or above, that rate shall stay at 12%. The SDLT rate for anything under or up to £125,000 will remain at zero.
For further clarification, a property bought for £180,000 would be taxed at 0% for the first £125,000 and 2% for the next £55,000. In total, this would mean a buyer would pay £1,100 in SDLT. First-time buyers in England or Wales would not need to pay SDLT on this property.
Buyers might also be liable to pay 5% on top of the normal SDLT rates if buying a new residential property as an investment or second home. This additional 5% rate may also apply if the property already owned is outside England, Wales and Northern Ireland.
Do first-time buyers have to pay Stamp Duty?
If you’re buying your first home for £300,000 or less, you would not have to pay any stamp duty. If the property is worth between £300,000 and £500,000, you would pay stamp duty on the amount between £300,001 and £500,000, at a rate of 5%. As stated above, there is no longer relief for properties bought for over £500,000.
The Three Important Things to Take Away:
- First-Time Buyer Relief has decreased (relief now applies up to £300,000 only)
- First-time buyers will no longer receive any SDLT relief on properties costing over £500,000
- The SDLT threshold has dropped. Buyers will now start paying SDLT on any property priced over £125,000
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Instruct a Conveyancing Solicitor
Regardless of whether you are affected by the new SDLT changes or not, it is helpful to involve a qualified and regulated conveyancing solicitor as soon as you have found a property you are interested in buying.
Delaying this step until your offer is accepted may lead to prolonged delays. You will need a solicitor from the point the seller accepts your offer. This is because the estate agents involved will need to issue the sales memorandum to both solicitors.
Conveyancing Solicitors London
At Rose & Rose, we understand that the property-buying journey can be daunting. That is why we are here – we can help alleviate the stress by providing highly personalised residential conveyancing services. We have the specialised skills and knowledge required to handle property transactions.
Our residential conveyancing team will handle your transaction efficiently and effectively while clearly explaining the process to you. Furthermore, our quotes will always be transparent and competitive.
To speak with a member of our team, email info@roselegal.co.uk to discuss the best way forward for you, and we will provide you with further advice tailored to your circumstances.
This blog post is not intended to be taken as advice or acted upon. If you are seeking legal advice, please contact our team of solicitors.
