Looming Changes in Stamp Duty, act Now before it’s too late!

With the UK Government having announced changes to stamp duty in the Autumn budget, many homebuyers are asking: “how will these changes affect the property market and what steps should I take to minimise the financial impact?”

Let us help you break down what stamp duty is, how potential changes could affect you when buying a house and the practical steps you can take now to prepare for these changes.

What is Stamp Duty?

Stamp Duty Land Tax (SDLT) is a tax paid when you purchase property or land in England and Northern Ireland. The amount of stamp duty you pay depends on the price of the property and various thresholds that currently exist. First-time buyers benefit from exemptions, but other homebuyers pay a percentage of their property price above certain limits.

Currently, no stamp duty is paid on the first £250,000 of the property price for general homebuyers, and first-time buyers are exempt up to £425,000. The rate increases with higher-priced properties.
What do the SDLT changes mean for buyers?

Stamp Duty Land Tax is set to return to its higher levels on the 31st of March 2025, so if you don’t act now you could end up paying thousands of pounds extra after that.

Here is a reminder of the current Stamp duty rates:

• 0% up to £250,000
• 5% £250,000 to £925,000
• 10% £925,001 to £1.5 million 
• 12% the remaining amount above £1.5million

Following the Budget Announcement, below is the new stamp duty rates as of the 31st of March 2025:

• 0% - up to £125,000
• 2% - from £125,001 to £250,000
• 5% - from £250,001 to £925,000
• 10% - from £925,001 to £1.5 million
• 12% on the remaining amount above £1.5 million 

If you own another residential property, you face paying a further 3% on top of these rates:

• 0% becomes 3%
• 2% becomes 5%
• 5% becomes 8%
• 10% becomes 13%
• 12% becomes 15%

How will these changes affect you?

1.    Higher costs for buyers

As the threshold for paying stamp duty has lowered, buyers face higher upfront cost when purchasing a home.

2.    Impact of Property Prices

Historically changes in Stamp Duty have affected the Housing market, higher stamp duty costs can cool demand, which might put downward pressure on property prices, however if buyers rush to complete transactions before any new rules come into effect, there could be a temporary spike in demand.

3.    First Time Buyers and Investors

First Time buyers could still benefit from exemptions depending on how the Government adjusts the rules. Investors and second-home buyers, however, may face stiffer penalties, making it more expensive to grow or diversify property portfolios.

What can you do NOW to beat the Stamp Duty Increase

With changes expected, taking action now can help you avoid paying more in stamp duty later; here are some practical steps to consider:

1.    Complete your purchase before the 31st of March 2025

If you are already in the process of buying a property, accelerating the transaction to complete before the impending changes. This is particularly important if you are purchasing a higher-value property or an investment property, where potential increases could have a more significant impact.

2.    Get your Mortgage in place early

If you are considering buying a property but haven’t yet secured a mortgage, start the process as soon as possible. Mortgage approvals can take time and having everything in order will put you in a better position to close the deal before any stamp duty changes come into effect.

3.    Work with your solicitor/conveyancers

Your solicitors/conveyancers play a crucial role in ensuring your purchase completes smoothly. It is therefore very important to choose the right solicitors to help you achieve your desired end goal, here at Winston Solicitors we pride ourselves in giving excellent service to our clients. 

4.    Reassess your Budget

If you are planning to buy a home in the near future but haven’t yet started the process, now might be a good time to reassess your budget in light of the Stamp Duty increases. Factor in potential for higher upfront costs and speak with a financial advisor or mortgage broker to understand how thus might affect your overall affordability. 

Taking Steps to Understand Stamp Duty

With the changes to Stamp Duty looming, its essential to stay informed and take proactive steps if you’re in the market for a new home. Whether you’re a first-time buyer, an investor or someone looking to move house, consulting with a Conveyancer can help you navigate the upcoming changes and ensure you’re prepared.

If you need advice or assistant with, your property purchase, contact our team of experts today. We can provide tailored guidance to help you make informed decisions.