The Autumn Budget saw changes to stamp duty relief for first-time buyers. If you’re thinking of buying a property in 2025, what does this mean for you?
Last month, Chancellor Rachel Reeves announced in the Autumn Budget that stamp duty changes will be effective from 1 April 2025. If you’re a first-time buyer hoping to buy a property, how will these changes affect you?
What is stamp duty?
Stamp duty land tax (SDLT) is a mandatory tax you must pay when you purchase either property or land in England and Northern Ireland (in Scotland, you must pay Land and Buildings Transaction Tax – LBTT – while in Wales, buyers are subject to Land Transaction Tax – LTT).
What’s changing?
Currently, you don’t need to pay any stamp duty on a property costing less than £250,000. First-time buyers are also entitled to stamp duty relief on properties costing less than £425,000, meaning they don’t have to pay any stamp duty on a property up to that amount. They also receive a reduced rate (5% of a property’s value) on properties costing between £425,001 and £625,000.
However, these rates only apply until 31 March 2025, after which they will change and revert to the rates we saw before September 2022.
This means that from 1 April 2025, you won’t pay stamp duty on properties costing less than £125,000, and the nil-rate threshold for first-time buyers will drop from £425,000 to £300,000. In addition, the maximum home value for which first-time buyers can claim relief is set to drop from £625,000 to £500,000. This means that if a property costs more than £500,000, first-time buyers won’t qualify for any stamp duty relief.
How will stamp duty changes affect first-time buyers?
Unfortunately for first-time buyers, the changes in stamp duty will equate to higher overall costs for homes priced above the new thresholds. This could make it harder to get on the property ladder.
The stamp duty deadline
Of course, these changes don’t come into effect until 1 April 2025, so if you’ve been thinking about getting on the property ladder, this could be your incentive to do it! There are still more than four months to go, which, while a tight deadline, is not impossible. We’re here to help you get the ball rolling and we’re happy to answer your questions.