Changes to the Stamp Duty from 31st March 2025 – Residential Properties
Temporary SDLT thresholds were introduced in September 2022 to help those at the lower end of the property market with affordability and to invigorate the property market. This was only a temporary measure and from 31st March 2025, the following changes will come into effect (which also includes the changes from 31st October in connection with increased stamp duty for additional dwellings):-
The nil rate SDLT threshold for residential property, which is currently £250,000, will return to the previous level of £125,000.
- Example – non-first time buyer purchasing a replacement main residence, current stamp duty paid for a house purchased at £250,000 is £0, from 31st March 2025 it will be £2,500.
- Example – non-first time buyer purchasing a replacement main residence, current stamp duty paid for a house purchased at £500,000 is £12,500, from 31st March 2025 it will be £15,000.
- Example – investment / second home buyer, current stamp duty paid for a house purchased at £250,000 is £12,500, from 31st March 2025 it will be £15,000.
- Example – investment / second home buyer, current stamp duty paid for a house purchased at £500,000 is £37,500, from 31st March 2025 it will be £40,000.
The nil rate threshold for first-time buyers, which is currently £425,000, will return to the previous level of £300,000.
- Example – first time buyer current stamp duty paid for a house £325,000 is £0, from 31st March 2025 it will be £1,250.
- Example – first time buyer current stamp duty paid for a house £425,000 is £0, from 31st March 2025 it will be £6,250.
The maximum purchase price for which First-Time Buyers Relief can be claimed, which is currently £625,000, will be decreased to £500,000.
- Example – first time buyer current stamp duty paid for a house £500,000 is £3,750, from 31st March 2025 it will be £10,000.
- Example – first time buyer current stamp duty paid for a house £625,000 is £10,000, from 31st March 2025 it will be £21,250.
Note that these calculations are based on individual buyers who are resident in the UK, different rates apply to non UK residents and company purchasers.
To take advantage of the current rates, completion would need to take place on or before Friday 28th March 2025.
First time buyers are advised to proceed with caution, one of the most difficult matters when it comes to buying a property is that there can be a chain of parties involved, lenders and third-party involvement, and therefore swift progress can be completely out of your hands. It is advised that when you start the conveyancing process that you make it explicitly clear to the selling agent, the seller, and your solicitor that you have a completion deadline specifically to take advantage of the benefit of the reduced rates and that if the deadline is missed, you will seek to renegotiate the purchase price to take the extra stamp duty liability into account. A very rough guide is that the conveyancing process from start to finish can take around three to four months.
Bartons are here to help guide you through your matter, we have years of experience having dealt with hundreds of transactions affected by the stamp duty changes during the pandemic.
About The Author
Kristy Giles is a Chartered Legal Executive, Director, and Head of Conveyancing.
Kristy deals with all types of complex residential conveyancing.
Kristy can be contacted on kjg@bartons.co.uk
