Thousands of property buyers are rushing to complete their purchase before a major stamp duty change comes into force.
Stamp duty is a tax that sometimes has to be paid when you buy a property. It all depends on how much the property is worth, if you’re a first-time buyer, and if the property you’re buying will be your main home, or if you’re purchasing is a second home. There are also different stamp duty rates England, Scotland, Wales or Northern Ireland.
Under current rules in England and Northern Ireland, you have to pay stamp duty if your property is your only residence and is worth over £250,000. This higher rate was introduced in September 2022 but it is due to go back down to its previous level of £125,000 from April 1.
This means the last day to complete on a house sale before stamp duty changes is March 31. If you’re a first-time buyer in England and Wales, you start to pay stamp duty if the property you’re buying is worth over £425,000 – but this will go back down to £300,000 from April 1.
Will changes to stamp duty affect your property sale? Let us know: mirror.money.saving@mirror.co.uk
It is estimated that 74,000 buyers in England will miss the stamp duty deadline, according to property website Rightmove. You pay stamp duty based on the portion of the property value where it applies. For example, under the current rules, if you’re buying a property worth £350,000 and you’re not a first-time buyer, you wouldn’t pay any stamp duty on the first £250,000.
You would then pay 5% on the part that is worth between £250,001 and £350,000, which is the equivalent of paying 5% of £100,000. The current stamp duty bill on a property worth £350,000, for someone who isn’t a first-time buyer, would be £5,000 – but after April 1, it would jump to £7,500.
This is because you would only pay zero stamp duty on the first £125,000, then you would pay 2% on the part that is worth between £125,001 and £250,000 (equivalent to paying 2% on £125,000) and 5% between £250,001 and £350,000 (equivalent to paying 5% on the remaining £100,000).
On a property that is worth £500,000, the current stamp duty bill would be £12,500 – but this will jump to £15,000 from April 1. If you’re a first-time buyer and you’re purchasing a property worth £350,000, you wouldn’t pay any stamp duty right now – but after April 1, you would pay £2,500.
You need to pay stamp duty within fourteen days of buying a property. Your solicitor will help you pay your stamp duty bill, although you can also do it yourself online. It is also possible to add stamp duty to your mortgage if your lender agrees to let you do this – but keep in mind, this can affect your affordability and means you’ll be borrowing more, which will increase how much you pay back in interest over time.
Here are the current stamp duty rates in England and Northern Ireland that will remain in place until March 31, 2025:
Here is how stamp duty rates will change in England and Northern Ireland from April 1, 2025:
First-time buyers currently only benefit from reduced stamp duty rates if they buy a property worth £625,000 or less. This will reduce to £500,000 from April 1.
Stamp duty is known as land and buildings transaction tax in Scotland and the following rates apply:
In Wales, stamp duty is known as transaction tax and the current rates are applied to property purchases:
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