Date Published 17 December 2024

What Stamp Duty Changes Mean for Buyers and How to Beat Them

Changes to Stamp Duty come into force next year. Read on to learn how much they'll cost you and how to deal with them effectively.

December is often a quiet time in the property market, but not this year. Buyer demand, especially among first-time buyers (FTBs), is on the rise, driven by impending changes to Stamp Duty.

What's Changing?

Stamp Duty cuts announced in the 2022 Mini-Budget will end on 31 March 2025. From 1 April 2025, Stamp Duty thresholds will revert to pre-September 2022 levels, and the FTB Relief will reduce significantly.

FTBs: The threshold for paying Stamp Duty will drop from £425,000 to £300,000, with relief applying only up to £500,000 (currently £625,000).

Home-movers: The threshold will drop from £250,000 to £125,000.

The rates will return to:

2% for the portion from £125,001–£250,000

5% for £250,001–£925,000

10% for £925,001–£1.5 million

12% for amounts over £1.5 million

The second-home surcharge has already increased from 3% to 5%.

Who's Affected?

FTBs will feel the pinch. The proportion of FTBs paying Stamp Duty is set to double to 40%.

For instance:

An FTB buying a £310,000 home will pay £500 after April (currently nothing).

An FTB purchasing a £425,000 property will see their bill rise from £0 to £6,250.

Home-movers will also face higher costs, with Stamp Duty on a £500,000 purchase increasing from £12,500 to £15,000.

Market Implications

Higher-priced regions will feel the biggest impact, with many buyers racing to complete deals before the deadline. Sellers, facing potential increases in their Stamp Duty bills, may be more flexible to secure a sale quickly.

FTBs and cash buyers could find themselves in strong negotiating positions as sellers aim to avoid complex property chains.

How to Act Fast

To beat the deadline, surround yourself with experienced professionals. Choose a skilled estate agent, get conveyancing recommendations, and stay organised with paperwork. Respond promptly to queries and clarify your goals to everyone involved in the transaction.

Want to get ahead of the changes? Contact us today to make your move happen before the Stamp Duty deadline.

If you found this information helpful, please share it with someone planning to move.

Frequently Asked Questions

1. When will the new Stamp Duty changes take effect?

The changes will come into effect on 1 April 2025, with thresholds reverting to pre-September 2022 levels.

2. How will the changes affect first-time buyers?

First-time buyers will pay Stamp Duty on purchases over £300,000 instead of the current £425,000 threshold. Relief will only apply up to £500,000.

3. How much more will home-movers pay in Stamp Duty?

The threshold for home-movers will drop from £250,000 to £125,000, increasing costs for many buyers. For example, Stamp Duty on a £500,000 home will rise from £12,500 to £15,000.