What Is Stamp Duty?

Stamp Duty Land Tax (SDLT), or simply ‘stamp duty,’ is a tax payable on property purchases in England and Northern Ireland. The amount is calculated as a percentage of the purchase price.

What Is Stamp Duty Relief for First-Time Buyers?

Introduced in November 2017, stamp duty relief aimed to help first-time buyers get onto the property ladder. In September 2022, the government expanded the 0% tax threshold from £300,000 to £425,000—a move that significantly reduced the upfront costs for many.

Current Stamp Duty Rules for First-Time Buyers

Here’s what you pay under the existing rules:

• Properties costing up to £625,000:
  • 0% tax on the first £425,000
  • 5% tax on the remaining value
• Properties costing more than £625,000:
  Relief does not apply; you pay the standard rate of stamp duty.

What Will Change After 31st March 2025?

The new rules will lower the relief thresholds:

• Properties costing up to £500,000:
  • 0% tax on the first £300,000
  • 5% tax on the remaining value
• Properties costing more than £500,000:
  Relief will not apply, and the standard rates of stamp duty will be payable.

Stamp Duty: Before and After the Change

Examples of the Impact

Example 1: Buying a £600,000 Property

• Before 31st March 2025:
  • 0% tax on the first £425,000
  • 5% tax on £175,000 = £8,750 SDLT
• After 1st April 2025:
  • No relief. Standard rates apply:
    • 0% on the first £125,000
    • 2% on £125,001–£250,000
    • 5% on £250,001–£600,000 = £20,000 SDLT

Example 2: Buying a £450,000 Property

• Before 31st March 2025:
  • 0% tax on the first £425,000
  • 5% tax on £25,000 = £1,250 SDLT
• After 1st April 2025:
  • 0% tax on the first £300,000
  • 5% tax on £150,000 = £7,500 SDLT

Why Move Before 31st March 2025?

The upcoming changes mean:

1. Higher costs for first-time buyers: Tax thresholds will drop, making homebuying more expensive.
2. Reduced affordability: You’ll have to budget for a larger tax bill or settle for a smaller property.

If you’re thinking of buying, now is the time to act! Remember, the average homebuying process takes 12–16 weeks, so starting before Christmas 2024 gives you the best chance to complete in time.

Let Henshaw Fox Help You Navigate the Changes

At Henshaw Fox, we’re here to guide first-time buyers every step of the way. From finding your dream home to connecting you with trusted conveyancers, we’ll make the process as smooth as possible.

Don’t let the tax hike catch you out—contact us today to get started and make your move before the deadline!