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What the end of Stamp Duty holiday will mean for homebuyers

Posted 29/11/2024 by Your Move
Categories: Buying
Family

Stamp Duty rules are changing in April 2025 in England and Northern Ireland, potentially costing first-time buyers, home movers, and investors/owners of more than one property thousands of pounds.

However, you can avoid these added costs by moving into your new home or completing a new purchase before March 31, 2025.

Try our Stamp Duty Calculator to see how much you will pay today


What is Stamp Duty?

To provide certainty to taxpayers, Land and Buildings Transaction Tax (LBTT) rates and bands will stay at the current level until 2026. First-time buyer relief will also remain in place. 

How do the changes impact first-time buyers?

Right now, first-time buyers in England don’t pay any stamp duty on homes priced up to £425,000. Starting next April, homes between £300,001 and £500,000 will incur a 5% stamp duty rate.

For example:

  • Purchase price: £350,000
  • Current Stamp Duty for first-time buyers: £0
  • From April 1, 2025: £2,500

From April 1, 2025, the 5% is applied to the £50,000 that is over the starting point of £300,001.

If you're a first-time buyer in Scotland, until 2026 you'll pay no Stamp Duty on the first £175,000, then it’s 2% on £175,001 to £250,000, 5% on £250,001 to £325,000, 10% on £325,001 to £750,000, and 12% above £750,000.

For example:
•  Purchase price: £350,000
•  Stamp Duty for first-time buyers: £7,750 (includes £600 first-time buyer relief)

Until 2026, the 2% is applied to houses £175,000 up to £250,000 (= £1,500), and then you add a further 5% to go above £250,000 up to £325,000 (= £3,750), and then 10% from £325,001 to £750,000 (= £2,500). Total £7,750.

How will the changes affect buying and selling your main home?

Right now, home movers in England don’t pay any stamp duty on homes priced up to £250,000. Starting next April, homes between £125,001 and £250,000 will incur a 2% stamp duty rate.

For example:

  • Purchase price: £350,000
  • Current stamp duty for home movers: £5,000
  • From April 1, 2025: £7,500

From April 1, 2025, the 2% is applied to houses £125,000 up to £250,000 (= £2,500), and then you add a further 5% to go above £250,000 up to £925,000 (= £5,000). Total £7,500.

In Scotland, until 2026 home movers pay no Stamp Duty on the first £145,000, then it’s 2% on £145,001 to £250,000, 5% on £250,001 to £325,000, 10% on £325,001 to £750,000, and 12% above £750,000.

For example:
•  Purchase price: £350,000
•  Stamp Duty for home movers: £8,350

Until 2026, the 2% is applied to houses £145,000 up to £250,000 (= £2,100), and then you add a further 5% to go above £250,000 up to £325,000 (= £3,750), and then 10% from £325,001 to £750,000 (= £2,500). Total £8,350.

How will the changes impact investors or owners of more than one property?

Right now, in England, investors or purchasers who own more than one property pay 5% stamp duty on homes priced from £0 to £250,000. Starting next April, homes between £0 and £125,000 will incur a 5% stamp duty rate.

For example:

  • Purchase price: £350,000
  • Current Stamp Duty for investors, owners of more than one property: £22,500
  • From April 1, 2025: £25,000

From April 1, 2025, the 5% is applied to houses up to £125,000 (= £6,250), and then you add a further 7% to go above £125,000 up to £250,000 (= £8,750), adding an additional 10% to go above £250,000 and up to £925,000 (= £10,000). Total £25,000

For Scotland, until 2026, investors or owners of more than two properties pay 6% stamp duty on the first £145,000; then it’s 8% on £145,001 to £250,000, 11% on £250,001 to £325,000, 16% on £325,001 to £750,000, and 18% above £750,000.

For example:
•  Purchase price: £350,000
•  Stamp Duty for investors, owners of more than one property: £29,350

Until 2026, the 6% is applied to houses up to £145,000 (= £8,700), and then you add a further 8% to go above £145,001 up to £250,000 (= £8,400), and then 11% from £250,001 to £325,000 (= £8,250), and then 16% from £325,001 to £750,000 (= £4,000). Total £29,350.

 

To avoid these added costs, move into your new home or complete a new purchase before March 31, 2025.

Ready for a fresh start? Book a FREE, no-obligation property valuation to find out how much you could secure for your next home.

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