The holiday on Stamp Duty Land Tax comes to an end on 31 March 2025.
Why are we telling you about this now? Well, it could save you thousands of pounds. But you need your transaction to be completed by 31 March 2025.
With all the time it takes time to find the right property, and go through the steps of the transaction, we recommend you start searching for a property no later than October 2024.
This summer could be the perfect time for house-hunting!
What is the holiday on Stamp Duty Land Tax?
The UK Government introduced different rules around Stamp Duty Land Tax in September 2022.
In short, the thresholds that dictate how much stamp duty is payable when you buy a house increased temporarily. That means that home movers, and first time buyers can buy more expensive homes, without having to pay quite so much Stamp Duty Land Tax.
Who qualifies for the stamp duty holiday?
First time buyers benefit the most from the stamp duty holiday. At the moment, you can buy a home for up to £425,000 without paying any Stamp Duty Land Tax.
Stamp duty is thereafter paid as follows:
| Property value | SDLT rate |
|---|---|
| Up to £425,000 | Zero |
| The next £500,000 (the value between £425,001 to £925,000) | 5% |
| The next £575,000 (the value between £925,001 to £1.5 million) | 10% |
| The remaining amount (the value above £1.5 million) | 12% |
If you’re moving home, you also get more relief on stamp duty for the first £250,000 of your home. You’ll pay stamp duty on any remaining amount, and we’ve included a table of the rates below.
How much can you save?
The savings are significant and you could save yourself thousands of pounds by completing your purchase before 31 March 2025.
Let’s have a look at an example.
If you’re a first time buyer, and the home you want to buy is £425,000, then you pay zero stamp duty land tax at the moment. From 1 April 2025, you’ll have to fork out £2,500 in tax for the same home.
If you’re moving home into a house that is £425,000 then you currently pay £8,750 in SDLT. From April 2025 you’ll pay £11,250. Completing before 31 March 2025 also saves you £2,500.
What is the deadline?
You need to have completed your transaction by 31 March 2025.
That means that all the searches have been completed, all the enquiries are raised and answered, all the paperwork is done and dusted, and you’re moving into your new home by 31 March.
When to get the ball rolling
With that in mind, it’s a good plan to get the ball rolling sooner rather than later.
An average residential property transaction takes between 12 and 16 weeks.
But if you’re in a chain, it can take much longer. Equally, if your survey highlights an issue that makes you change your mind on the property, you’re back to square one.
Our advice is to give yourself at least six months, so begin house-hunting no later than October 2024.
Bear in mind though, that more houses go on the market in Spring and Summer, and it’s generally a more pleasant experience to move house in good weather. So if you’re thinking about moving, maybe use the Summer of 2024 to start looking in earnest.
What happens after 31 March 2025?
From 1 April 2025, stamp duty reverts to pre-September 2022 rates. That means that the 0% threshold is back to £125,000 for home movers and £300,000 for first time buyers.
Here’s a comparison table to give you an idea of the changes:
|
SDLT
|
Until 31 March 2025 |
From 1 April 2025 |
|
Home movers
|
||
|
0%
|
Up to £250,000 | Up to £125,000 |
| 2% | – | £125,001 to £250,000 |
| 5% | £250,001 to £925,000 | £250,001 to £925,000 |
| 10% | £925,001 to £1,500,000 | £925,001 to £1,500,000 |
| 12% | Above £1,500,000 | Above £1,500,000 |
|
SDLT
|
Until 31 March 2025 |
From 1 April 2025 |
|
First time buyers
|
||
| 0% | Up to £425,000 | Up to £300,000 |
| 5% | £425,001 to £925,000 | £250,001 to £925,000 |
| 10% | £925,001 to £1,500,000 | £925,001 to £1,500,000 |
| 12% | Above £1,500,000 | Above £1,500,000 |
If you’re a first time buyer and the home you’re buying is above £625,000, then the stamp duty relief is not available. The normal stamp duty rules for home movers will apply to you. From 1 April 2025 this threshold reduces to £500,000.
Key considerations
- Assess your budget
It’s worth having these thresholds in mind when you’re searching for a property, so that you can take advantage of as many savings as possible. Moving home is expensive, but if you can save a few thousand by buying a slightly cheaper home, then you can put that money towards decorating and furnishings instead.
- Start early
Many transactions are straightforward, and we can often complete a transaction in around four weeks. But sometimes matters are outside our control, such as issues with the survey, or problems further up the chain. If you want to lock in the stamp duty relief, start the process as soon as you can.
We’re happy to advise you on your conveyancing, and make sure the stamp duty calculations are correct for you. Please do get in touch if you’d like any help with the legal aspects of your move.