The level of stamp duty free properties will fall by 20% of over 90,000 properties as of April when the stamp duty threshold reverts back to £300,000 for first-time buyers. Last week, Chancellor Rachel Reeves gave no indication in her Budget that the government would extend the current First Time Buyer stamp duty threshold, which is due to expire in March.
From 1 April 2025, the current stamp duty threshold up to which first time buyers don’t pay stamp duty in England is reducing by £125,000 from its current level of £425,000 down to £300,000.
This will lead to a reduction of 20% of properties that are not impacted by stamp duty for first time buyers.
While the national tax-free stock reduction stands at 20%, First time buyers in some cities are going to see a larger drop in the number of homes available to them.
There was hope that last week’s Autumn Budget would extend the current stamp duty relief given to first-time buyers, at the very least. Those currently on the hunt for their first property still have time to beat next year’s deadline but they need to complete within the next five months.
Tag: stamp duty
Stamp Duty Rates
Residential Property Stamp Duty Rates
A purchaser pays Stamp Duty Land Tax (SDLT) on all residential purchases above £125,000. Property prices below £125,000 pay zero rate SDLT. Note that this only applies to residential property purchasers. The rates of stamp duty are as follows
£125,000 or below = 0%
£125,000.01 – £250,000 = 2%
£250,000.01 = £925,000 = 5%
£925,000.01 – £1,500,000 = 10%
Above £1,500,000.01 = 12%
For example, a property is purchased for £300,000.
First £125,000 = £0
2% between £125,000 and £250,000 = £2,500
5% between £250,000 and £300,000 = £2,500
Total stamp duty = £5,000.
Stamp Duty Rates for Buy to let Landlords
Buy to let landlords are set to be hit with an extra 3% stamp duty on the above rates from April 2016. In the above example of a £300,000 property purchase, stamp duty on the first £125,000 will be at 3% = £3,750. The next £125,000 will have a rate of 5% = £6,250. The final £50,000 will be taxed at 8% = £4,000. Total stamp duty tax = £14,000. That is a £9,000 increase.
It is not just landlords that will be hit but anyone owning a second home. This could be parents buying a property for their children or a couple setting up home where one is already a homeowner.
The higher rates will only apply to additional properties purchased in England, Wales and Northern Ireland on or after April 1 2016. Transactions below £40,000 are exempt as well as transactions involving houseboats and caravans.
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