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.

Case Study

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.

Is there anything which can reduce the Stamp Duty I am liable to pay?

Even though the 0% band is being increased, to help you make the most of the current Stamp Duty rates, consider these strategies:

Consult with a property expert or tax advisor to ensure you know all available options for making the most of Stamp Duty costs based on your unique circumstances.

I am a property investor, does this affect me?

In addition to residential buyers, it is worth investors considering their future investment plans, as bringing forward investment plans to take advantage of the current Stamp Duty rates before the 0% band reverts to £250,000 in March 2025 could save a substantial amount of money. Although the additional property surcharge will apply before and after March 2025, the overall Stamp Duty due will be less if you complete it before 31st March 2025.

Expert Advice

Stamp Duty is a specialist area, and its complexities can be challenging to navigate. Therefore, it’s advisable to seek advice from tax experts or property lawyers who can provide tailored guidance based on your specific situation. Their expertise can help you make informed decisions and potentially save you a substantial amount of money.

Summary

In conclusion, the impending return of Stamp Duty rates to their previous levels in March 2025 is a crucial consideration for anyone involved in property transactions. Being aware of these changes can help you make timely decisions and plan your property transactions accordingly.

By understanding the current landscape, considering your options, and seeking expert advice, you may be able to optimise your property investment and save significantly on Stamp Duty expenses.

If you have any queries regarding moving home, buying your first home or investing in additional properties, please do not hesitate to get in touch with me at 01603 751971 or by email at leanneriches@hansells.co.uk

It is important to note that Stamp Duty is a specialist area and we would recommend taking advice from a tax expert if you have concerns. This article provides general information and should not be considered a substitute for personalized advice from a tax expert or property lawyer who is aware of your individual circumstances.

 *based on residential rates, not taking account of any surcharges or reliefs applicable to Stamp Duty.