Are you aware of the next Stamp Duty Land Tax Deadline which ends on 31st March 2025? Read the article to find out how it may impact you.

What is Stamp Duty Land Tax?

You must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price in England and Northern Ireland.

You pay the tax when you:

  • buy a freehold property.
  • buy a new or existing leasehold.
  • buy a property through a shared ownership scheme.
  • are transferred land or property for payment, for example you take on a mortgage or buy a share in a house.

How much you pay depends on:

  • whether the land or property will be used as a residential property or as a non-residential or mixed-use property.
  • whether you are eligible for a relief or an exemption. For example, if you’re buying a residential property there are different rates of SDLT if:
  • you’re a first-time buyer.
  • you already own a property and you’re buying an additional property.
  • you’re not a UK resident.

You can use HM Revenue and Customs’ (HMRC) stamp duty land tax calculator to work out how much tax you’ll pay. Please see the following link. Stamp Duty Land Tax Calculator

The total value you pay SDLT on (sometimes called the ‘consideration’) is usually the price you pay for the property or land.

Sometimes it might include another type of payment like:

  • works or services.
  • release from a debt.
  • transfer of a debt, including the value of any outstanding mortgage.

What are the changes?

Back in September 2022 the Government increased the 0% stamp duty land tax threshold band on residential properties from £125,000 to £250,000 with the aim to support the housing market and the hundreds of thousands of jobs and businesses which rely on it. The intention was to lower the upfront costs of moving home and support those looking to get on and up the housing ladder however, this was only a temporary measure and the government announced that this measure will end on 31st March 2025 with the threshold going back down to £125,000 on 1st April 2025 as part of its commitment to fiscal responsibility and ensuring trust and confidence in our national finances.

This means that if you are wanting to take advantage of this saving then you need to be thinking of finding somewhere to buy very soon especially as transactions are currently taking some time to go through particularly where there is a chain involved.

Stamp Duty Land Tax which is also referred to as Stamp Duty has seen many changes over recent years.  Not much attention has been made though to the reversion of the stamp duty land tax threshold from £250,000 to £125,000 on 1st April 2025 and this deadline is creeping up.

With the cost-of-living crisis and increased mortgage rates from what they were a few years ago every penny saved helps.  If you are looking at selling before you buy many sellers are finding that it is taking longer to find a buyer which will have a knock-on effect as to when you will be able to complete.

As with other stamp duty deadlines we as solicitors are going to be inundated with requests to complete by 31st March 2025 because of the potential saving in stamp duty land tax.  It may well be too that removal firms will be booked up and not able to accommodate everyone wanting to move to take advantage of this saving.

How much will I save?

Currently, a buyer of a £250,000 home pays £0 in Stamp Duty, but if they were to buy after March 2025, they would be looking at a Stamp Duty bill of £2,500. (There may be an additional 3% of the purchase price payable on top though if the property that you are buying is an additional property for you or anyone that you are married to and is not a replacement main residence for any property that you are selling.)

For those eyeing a £500,000 property, the current Stamp Duty rate is £12,500, but post-March 2025, it will increase to £15,000. (As above there may be an additional 3% of the purchase price payable on top though if the property that you are buying is an additional property for you or anyone that you are married to and is not a replacement main residence for any property that you are selling.)

These numbers highlight the significance of acting before the rates go back up.

It is also important to note that the amount payable depends on the day you complete your transaction; if you agreed to buy before 31st March 2025, but completion does not happen until after 31st March 2025, then the increased rates will apply.

First time Buyers Relief

The nil-rate threshold for First Time Buyers’ Relief was also temporarily increased in 2022 from £300,000 to £425,000 and the maximum property value that is eligible for First Time Buyers’ Relief was increased to £625,000 from £500,000.  On 1st April 2025 the threshold will revert back to £300,000 and the maximum property value will revert back to £500,000.

Expert Advice

Stamp Duty is a specialist area, and its complexities can be challenging to navigate. WBW are not stamp duty specialists. We always recommend that clients seek advice on any complex stamp duty queries with an accountant specialising in stamp duty land tax to establish all available options for making the most of any stamp duty reliefs based on clients own unique circumstances.

Summary

The return of Stamp Duty rates to their previous levels in March 2025 is an important consideration for anyone involved in property transactions and taking this into account now will mean that you may be able to save significantly on stamp duty land tax.

Please see the following link below to HMRC’s Policy Paper – Stamp Duty Land Tax – temporary increase to thresholds published 28th November 2022. Stamp Duty Land Tax — temporary increase to thresholds – GOV.UK (www.gov.uk)

If you have any queries regarding moving home, buying your first home or investing in additional properties, please do not hesitate to contact either myself, Louise Crockford, or one of the other members of the property team here at WBW Solicitors and Chartered Financial Planners. My phone number is 01566 771102 and my email address is louisecrockford@wbw.co.uk.

Louise Crockford

CILEX Lawyer (Chartered Legal Executive and CILEX Conveyancing Practitioner)

Launceston Office