Movers face upcoming changes to stamp duty relief – what you need to know
If you’re looking to move house, there’s an important date to mark in your calendar – Monday, 31st March 2025. This is the day that the current stamp duty relief will end and thresholds will change in England and Northern Ireland.
But what does this mean for your house move? How much stamp duty will you have to pay? Keep reading to find out all the important answers.
Remind me, what is stamp duty?
Depending on when you last moved or when you bought your house, you may need reminding what stamp duty is. Stamp Duty Land Tax (SDLT) is the tax you pay when you buy a property or piece of land.
The amount you pay is based on the property’s value, with different bands depending on how much you agree to buy it for. It is also determined by whether it is a second home or additional property, and by its location in the United Kingdom. Costs and bandings can be different in Scotland and Wales as the devolved nations are allowed to set their own rules.
How much is it now?
Thanks to stamp duty relief introduced as part of the mini-budget, buyers in England and Northern Ireland, of homes worth less than £250,000 do not have to pay any stamp duty. This was increased from £125,000.
For any purchase over £250,000, buyers will pay 5% in stamp duty on the amount above this value. This applies right the way up to properties worth £925,000.
On purchases in excess of £925,000, buyers pay 10% in stamp duty up to £1.5 million. Anything above this is charged at the highest rate of stamp duty at 12%.
How is it changing?
After the 31st March 2025, stamp duty relief will end and thresholds will revert back to where they were prior to the mini-budget. This means stamp duty will now paid be on purchases above £125,000.
A 2% rate of stamp duty will return and will be payable on the next £125,000 – the portion between £125,001 and £250,000.
After this, the bands remain the same with 5% stamp duty on the amount above this value – up to £925,000 – and so on right up to £1.5 million and above.
The result, according to research by Leeds Building Society, means that more than nine-in-ten properties on the market (93%) will now be subject to stamp duty.
What does this mean for movers?
For those climbing the ladder and moving into bigger, more expensive properties, the change is likely to add an additional cost to your move. With the average property in England costing £309,000 in September, the same is likely true for downsizers too.
For example, if a house is purchased for £300,000 before the end of March, the stamp duty bill would be £2,500. After March 31st though, that figure doubles to £5,000.
Some buyers may decide to bring their plans forward in response to increasing costs. It’s important to remember though that transactions must be completed by the end of the March. With purchases currently taking anywhere between six weeks and six months to complete, those hoping to do so will need to act with real urgency.
Getting the right advice
Staying on top of changes to stamp duty is just one example of how buyers and movers can make informed decisions and manage any costs associated with their move. While it can be difficult to navigate changes to the likes of stamp duty, mortgage and protection advisers are well placed to help you understand what costs are involved and answer any burning questions throughout the process.
To book your appointment with a mortgage adviser, please call [Name] on [XXXX XXX XXX] or email [XXXXXXXXXX].
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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