From 1 April 2025, the rates of stamp duty will change. Let’s take a look at why this is happening and how it will impact first-time buyers.
What is stamp duty?
Stamp duty is a government tax that must be paid by buyers purchasing land or property over a set price threshold. The amount of stamp duty that must be paid is dependent on a number of factors, including whether the buyer is purchasing property for the first time.
What changes are being made to stamp duty for first-time buyers?
Currently, first-time buyers purchasing property for less than £425,000 are not liable for stamp duty; from April 1, 2025, this figure will fall to £300,000.
First-time buyers purchasing property worth up to £625,000 are eligible to pay a reduced rate of stamp duty; however, this price threshold will be reduced to £500,000 from 1 April 2025.
Stamp duty increases will impact first-time buyers
Unfortunately, stamp duty increases are likely to have a severe impact on many first-time buyers looking to take their first step onto the property ladder.
As an example, let’s say that a first-time buyer wants to purchase a property costing £525,000. If they were to complete their purchase before 1 April 2025, they would pay £5,000 in stamp duty; after the increase, the stamp duty will be £11,250.
What does this mean for the housing market?
As first-time buyers may find it more difficult to get onto the property ladder, property experts are forecasting a slowdown in sales across the country. It will be important for sellers to work with trusted estate agents in Bridgwater, such as https://www.sykesmoore.co.uk/sales/estate-agent/, to ensure their properties are being marketed to the widest possible pool of potential buyers.
Why is the change to stamp duty being implemented?
Back in September 2022, temporary stamp duty threshold increases were implemented by the government to provide the housing market with extra support. This measure was designed to conclude at the end of March 2025, which is why change is effective from 1 April 2025.
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