People moving house, landlords and first-time buyers had an unwelcome surprise in the Budget: changes to Stamp Duty Land Tax.
An immediate change was the increase in SDLT for those buying second homes, from 3% to 5%.
Landlords or property developers, as well as those buying residential properties through a limited company, are now paying this new 5% rate.
There is a further change being introduced from 1 April 2025 affecting first-time buyers and those moving house.
The previous government had lowered SDLT significantly, meaning that in most cases, first-time buyers had no SDLT to pay at all. But this was a temporary change, and the new government has ruled this must come to an end.
This means from April, the zero rate will drop from £250,000 to £125,000 for those moving house.
The nil rate threshold for first-time buyers, which is currently £425,000 will return to the previous level of £300,000. Also, first-time buyers’ relief will only be available on properties up to £500,000 (5% on properties £300,000 to £500,000) – currently, this is 5% on properties up to £625,000.
The implications of this are clear: from 1 April, SDLT will be a bigger expense for homebuyers, and will now figure in the costs for most first-time buyers. If you’re thinking of moving, try to do so before the changes come into effect.
If you’d like to talk to our conveyancing team about a forthcoming house move, please get in touch.
