Stamp Duty is due to go back up – Make the most of it now to maximise your savings; in this article, we will explore the impending return to higher rates and how to optimise your property investment before March 2025
What is changing?
Stamp Duty Land Tax, more commonly known as “Stamp Duty” or “SDLT”, has seen several changes over recent years. While many people have enjoyed the most recent reduction of Stamp Duty due to the Government increasing the 0% band from £125,000 to £250,000 back in September 2022, less attention has been paid to the fact that this is, unfortunately, only a temporary reduction.
Now that we are a year on from the change, it is worth noting that we only have a further 18 months at these current lower rates, which are due to end on 31st March 2025.
March 2025 might seem far away, but currently, with the cost of living crisis and rising mortgage rates, buyers are treading cautiously. Many sellers are finding that their properties are on the market for longer than they thought.
If you are considering a move within the next few years, it certainly would be wise to consider how much extra Stamp Duty you will pay if you decide to move after March 2025; the change could lead to a more limited market of properties if the “rise” in Stamp Duty rates (back to their previous norm) makes moving more unaffordable for some.
Let’s break down the potential savings: Currently, a buyer of a £250,000 home pays £0 in Stamp Duty, but if they were to buy after March 2025, they would be looking at a Stamp Duty bill of £2,500.
For those eyeing a £500,000 property, the current Stamp Duty rate is £12,500, but post-March 2025, it will increase to £15,000.
These numbers highlight the significance of acting before the rates go back up.
It is also important to note that the amount payable depends on the day you complete your transaction; if you agreed to buy before 31st March 2025, but completion does not happen until after 31st March 2025, then the increased rates will apply.