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The stamp duty holiday comes to an end

On 1 April 2025 the temporary increases to the stamp duty thresholds which came into force in September 2022 will come to an end.

Whilst the effects will be wide-ranging, the changes will undoubtedly impact first-time buyers the most and this applies across the whole of England. It’s estimated that the number of properties on the market that are exempt from stamp duty will, when the changes come into effect, fall from 64% to 44%. However, across London it’s estimated that the number of stamp-duty-free purchases will fall from 31% to 13%.

What are the changes and what will they mean for homebuyers?

The government wanted to give the struggling housing market a boost post-COVID, and so in September 2022 it increased the nil rate band – the price below which no stamp duty is payable – from £125,000 to £250,000. And for first-time buyers the government raised the stamp duty threshold from £300,000 to £425,000.

However, in her October 2024 Budget, Chancellor Rachel Reeves made the decision not to extend this temporary relief, meaning that from 1 April 2025 the stamp duty thresholds will revert to their original rates. As such, the levels for main residences will be as follows:

Property value Stamp duty main residence rate
Up to £125,000 0%
£125,001 – £250,000 2%
£250,001 – £925,000 5%
£925,000 – £1.5 million 10%
Over £1.5 million 12%

Until 1 April 2025, stamp duty rates for main residences are as follows:

Property value Stamp duty main residence rate
Up to £250,000 0%
£250,001 – £925,000 5%
£925,000 – £1.5 million 10%
Over £1.5 million 12%

From 1 April 2025 stamp duty thresholds for first-time buyers will be as follows:

Property value Stamp duty threshold for first-time buyers
Up to £300,000 0%
£300,001 – £500,000 5%

A first-time buyer purchasing a home for less than £300,000 won’t pay stamp duty, but if they buy a home for between £300,000 and £500,000, they will pay 5% stamp duty on anything over £300,000 and below £500,001. First-time buyers purchasing a property above £500,000 will no longer qualify for the additional stamp duty relief. This is also being reduced from the current threshold of £625,000 from the 1st of April further impacting first time buyers.

Currently, stamp duty rates for first-time buyers are as follows:

Property value Stamp duty threshold for first-time buyers
Up to £425,000 0%
£425,001 – £625,000 5%

Additional stamp duty rates are already in place for those owning multiple properties, which has helped to dampen the buy-to-let market. In some rural and coastal areas, the additional rates for buy-to-let properties have been welcomed, as it has helped deter investors from purchasing second homes and subsequently increasing property prices, preventing local residents from being able to purchase homes in their own towns and villages.

On 31 October 2024, the amount of stamp duty applicable for those purchasing additional properties increased from 3% to 5%, and from 1 April the threshold will be reduced from £250,000 to £125,000, impacting investors again.

From 1 April, the following stamp duty rates will apply for additional properties purchased in England:

Proportion of property value Stamp duty threshold for additional properties
Up to £125,000 5%
£125,001 – £250,000 7%
£250,001 – £925,000 10%
£925,001 – £1.5 million 15%
Over £1.5 million 17%


We’re here to help

If you have any queries about the upcoming stamp duty changes, or would like to speak to someone more generally about buying or selling property, we’re here to help and provide specialist support. Please contact the team on 020 7444 4030 or email us. If you are an existing client, please contact your usual adviser, who will be happy to assist you.


Rebecca Rider
Partner 
rrider@partnerswealthmanagement.co.uk
020 7444 4042

 

The contents of the article have been prepared solely for information purposes. The article contains information on financial products and services and such information is designed for and addressed solely to individuals seeking generic industry information. Past performance is no guide to future returns. The above content does not represent a personal recommendation. Your home is at risk of repossession if you do not maintain mortgage payments.

 

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