Stamp Duty Land Tax To Increase, Deadline Approaching: March 31, 2025
James Murphy posted on 16th October 2024
Are you aware of the impending Stamp Duty Land Tax (SDLT) deadline set for March 31, 2025? This article outlines what you need to know and how Stamp Duty 2025 could affect your property purchase.
What is Stamp Duty Land Tax?
Stamp Duty Land Tax (SDLT) is a tax you must pay when purchasing property or land exceeding a certain value in England and Northern Ireland. You’ll be liable for this tax when you:
Buy a freehold property
Purchase a new or existing leasehold property
Acquire a property through a shared ownership scheme
Transfer land or property for payment, such as taking on a mortgage or buying a share in a house
The amount of SDLT you owe depends on several factors:
Whether the property is residential, non-residential, or mixed-use
Whether you already own a property and are buying another
Your eligibility for relief or exemptions, such as being a first-time buyer or a non-UK resident
To calculate your SDLT, you can use HM Revenue and Customs’ (HMRC) SDLT calculator, available at Stamp Duty Land Tax Calculator.
Recent Changes and Upcoming Reversion
In September 2022, the government temporarily raised the 0% SDLT threshold for residential properties from £125,000 to £250,000 to stimulate the housing market. However, this measure is set to end on March 31, 2025, with the threshold reverting back to £125,000 starting April 1, 2025.
If you’re considering purchasing property, you should act quickly to take advantage of the current SDLT threshold. Property transactions can take time, especially when a chain is involved, so starting your search now is crucial.
The return to the previous SDLT threshold is approaching, and many buyers might overlook this deadline amidst the ongoing cost-of-living crisis and rising mortgage rates. Every penny counts, especially when selling before buying can extend the timeline.
As the deadline approaches, we anticipate a surge in requests for completion by March 31, 2025, which may lead to delays in services from solicitors and removal firms.
How Much Can You Save?
Currently, if you buy a home valued at £250,000, you’ll pay £0 in Stamp Duty. However, if you purchase after March 2025, you could face a bill of £2,500. If you’re buying an additional property, an extra 3% may apply.
For a £500,000 property, the current SDLT is £12,500, which would increase to £15,000 after March 2025. This underscores the importance of acting swiftly to secure savings before the rates rise.
Remember, the SDLT liability is determined by the completion date. If you agree to buy before March 31, 2025, but complete after this date, the higher rates will apply.
First-Time Buyers Relief
The nil-rate threshold for First-Time Buyers’ Relief was also temporarily increased in 2022, rising from £300,000 to £425,000, while the maximum eligible property value increased from £500,000 to £625,000. However, these thresholds will revert to £300,000 and £500,000, respectively, on April 1, 2025.
Currently, if you’re a First-Time-Buyer and purchase a property at £425,000, you’ll pay £0 in Stamp Duty. However, if you purchase after March 2025, you could face a bill of £6,250.
Considerations For Sellers
If you’re considering selling a property, listing now could be the best time to achieve a swift sale at a strong price. We anticipate a surge in interest over the next few months as buyers scrabble to secure a purchase before the stamp duty deadline.
Once the SDLT revision comes into effect buyers will have less purchasing power. This could lead to a decrease in asking prices as motivated sellers absorb the additional SDLT burden, either to keep their existing transactions in place or make their marketed properties more attractive to prospective purchasers.
Conclusion On Stamp Duty 2025
With the reversion of SDLT rates to previous levels in March 2025, now is the time to consider your property transactions carefully. Acting promptly could result in significant savings on Stamp Duty Land Tax. Remember the average transaction time in the UK is over 3 months so ensure you factor this into your moving timeline.
If you’re looking to buy a property or sell your property in Poole or Bournemouth our teams are here to help. Call our Poole office on 01202 710171 or our Bournemouth office on 01202 559922.
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James has lived in the Poole & Bournemouth area for over 25 years and has an extensive knowledge of the conurbation. He started his career in the property industry in 2015 following his graduation from the University of Kent, Canterbury and has worked in a variety of different roles in this time. Formerly a Sales Manager, he brings an in-depth understanding of the industry to his current role as Marketing Manager at Martin & Co.
