What is Stamp Duty?
Stamp Duty Land Tax (SDLT) is a tax that’s charged when you buy a property in the UK. The amount of Stamp duty will depend on the purchase price of the property.
Temporary changes to stamp duty
In September 2022, the government announced a temporary measure to increase the stamp duty threshold with the aim making property ownership more accessible.
Threshold changes;
· Increase to nil rate band from £125,000 to £250,000,
· Increase to First Time Buyers Relief nil-rate threshold from £300,000 to £425,000.
· Increase to First Time Buyers Relief property eligibility from £500,000 to purchases up to £625,000.
However, this temporary measure is currently set to end on 31st March 2025.
What does this look like?
Standard residential Purchase rates for SDLT
| Stamp Duty % | Threshold Under Temporary Measure | Threshold Post March 2025 |
| nil | Up to £250,000 (First Time Buyers up to £425,000) | Up to £125,000 (First Time Buyers up to £300,000) |
| 2% | N/A | The portion from £125,001 to £250,000 |
| 5% | The portion from £250,001 to £925,000 | The portion from £250,001 to £925,000 |
| 10% | The portion from £925,001 to £1.5 million | The portion from £925,001 to £1.5 million |
| 12% | The portion above £1.5 million | The portion above £1.5 million |
Example – Home Mover
| Purchase Price | Payable SDLT Under Temporary Measure | Payable SDLT Post March 2025 | Total Saving by purchasing pre-March 2025 |
| £250,000 | nil | £2,500 | £2,500 |
| £500,000 | £12,500 | £15,000 | £2,500 |
Example – First Time Buyer
| Purchase Price | Payable SDLT Under Temporary Measure | Payable SDLT Post March 2025 | Total Saving by purchasing pre-March 2025 |
| £325,000 | Nil | £1,250 | £1,250 |
| £425,000 | Nil | £6,250 | £6,250 |
| £600,000 | £8,750 | £15,000 | £6,250 |
A higher rate SDLT may apply if you own more than one residential property on the day of completion of your new property.
Act now!
While March 2025 might feel a long way off, considering the impending end of temporary measures, it’s sensible to assess your current circumstances if you’re contemplating a property purchase soon. Taking proactive steps now can help you avoid the potential increase in stamp duty costs later.
Reviewing your current situation, the mortgage market, savings, and purchase strategy is a wise move. You may already be in a good position to purchase.
There are several new mortgage products that have been released which could also enable you to purchase a property sooner.
Or, it may be that you could adjust your budget to boost your savings, transfer funds to a higher interest-bearing account, or capitalise on a government-backed savings scheme – such as a Lifetime ISA.
By increasing your deposit amount through these measures, you can expedite your property purchase timeline and avoid the added cost of increased SDLT.
Approved by In Partnership FRN 192638 April 2024
