Stamp Duty Land Tax changes from 31 March 2025

Are you unsure about whether to buy a property in 2024? The end of the temporary relief on Stamp Duty Land Tax (SDLT) may be enough reason to make the move now and benefit from potentially huge SDLT savings.

From 31 March 2025, SDLT rates will return to their previous levels. Many buyers are unaware of the savings they could make by moving now under the current rates.

Following the changes made by the Mini Budget in September 2022, we examined the current thresholds and rates set by the government. It was unknown if the changes would be made permanent or not.[1]

The aim of providing this relief is part of the “government’s commitment to support homeownership and promote mobility in the housing market, in turn supporting economic growth. Increased property transactions also add to residential investment and spending on durable goods.”[2]

In the autumn statement on 17 November 2022, the government announced that the Stamp Duty cuts introduced by the previous government in September will not be permanent, with plans to return the SDLT thresholds to their previous levels from 31 March 2025.

The SDLT nil-rate threshold (at which property buyers in England begin to pay SDLT) is currently £250,000. From 31 March 2025, this will return to the previous level of £125,000, in place prior to 23 September 2022.

The nil-rate threshold for first-time buyers (at which first time buyers in England begin to pay SDLT), currently £425,000, will return to its previous level of £300,000. As will the maximum purchase price for which First Time Buyers’ Relief can be claimed, reverting to £500,000 from the current level of £625,000.

Properties in Essex had an overall average price of £432,046 over the last year. [3] Below is a comparison of the SDLT due on a purchase before and after the SDLT threshold change and based on the average purchase price of a property in Essex.

Current SDLT rate on a standard freehold property purchase, UK resident/main residence:

The SDLT homebuyers pay when buying a freehold property for the average purchase price in Essex before the 31 March 2025 deadline is calculated as follows:

0% on the first £250,000= £0

5% on the remaining £182,046 = £9,102.30

Total SDLT = £9,102.30

SDLT rate from 31 March 2025 on a standard freehold property purchase, UK resident/main residence:

The SDLT homebuyers pay when buying a freehold property for the average purchase price in Essex after 31 March 2025 deadline is calculated as follows:

2% on the first £250,000 = £2,500

5% on the remaining £182,046 = £9,102.30

Total SDLT = £11,602.30

Completing your purchase before the changes come into effect can save you £2,500

While the changes will not take effect until 31 March 2025, the current SDLT rates, as introduced by the previous government, will continue to apply until that time.

It is unclear if any further amendments will be made to SDLT over the next year; the situation provides buyers with uncertainty leading up to 31 March and is guaranteed to cause panic in the conveyancing world the closer we approach the March deadline. With echoes of the SDLT Holiday from 2020/2021, Conveyancers, buyers, and sellers need to be aware of this deadline and prepare accordingly.

The deadline is fast approaching, and homebuyers need to be aware that a residential property transaction takes an average of 12 to 16 weeks to complete; however, you should be prepared for this to take much longer depending on your circumstances and wider factors, e.g. being part of a chain. Any property completion date that falls after this deadline could result in paying more SDLT.

The Residential Property team at Birkett Long consists of over 10 qualified Conveyancing Solicitors, Executives and Conveyancing Assistants. We handle property sales and purchases, remortgages, and transfers of equity, to name a few. We are specialists in Conveyancing and would be happy to assist you in your next property purchase so you can take advantage of the current SDLT rates before the changes become effective in March 2025.

We are accredited by the Law Society’s Conveyancing Quality Scheme (CQS), and our clients continue to provide excellent feedback, which can be viewed via our website and through Review Solicitors.

If you would like to discuss our conveyancing services, please get in touch. I can be contacted on 01206 217328 or via email at sarah.murphy@birkettlong.co.uk.

[1] Stamp Duty Land Tax Changes 2022 https://www.birkettlong.co.uk/site/blog/property/stamp-duty-land-tax-changes-2022

[2] https://www.gov.uk/government/publications/stamp-duty-land-tax-reductions-for-residential-properties/stamp-duty-land-tax-reduction-threshold-changes

[3] https://www.rightmove.co.uk/house-prices/essex.html