What the End of the Stamp Duty Holiday Will Mean for Homebuyers?

As we edge closer to April 2025, significant changes are coming to Stamp Duty, which will have a notable impact on homebuyers across England. Whether you’re a first-time buyer, moving to a new home, or purchasing an additional property, it’s important to understand how these changes might affect you.

How Will the Changes Impact First-Time Buyers?

For first-time buyers, the current rules are quite favourable—you don’t pay any Stamp Duty on properties priced up to £425,000. However, from April 1, 2025, the threshold will drop, meaning you’ll only avoid Stamp Duty on the first £300,000. For properties priced between £300,001 and £500,000, a 5% rate will apply to the amount above £300,000.

Here’s an example to put it into perspective:

• If you’re purchasing a home for £350,000, you currently pay £0 in Stamp Duty.
• From April 2025, you’ll pay £2,500.

This additional cost could be an important factor to budget for if you’re planning to step onto the property ladder in the near future.

How Will the Changes Affect Home Movers?

If you’re buying a new home to move into, the changes could also mean paying more in Stamp Duty. At present, you don’t pay any Stamp Duty on properties priced up to £250,000. However, from April 1, 2025, the tax-free threshold will be reduced to £125,000.

This means that properties priced between £125,001 and £250,000 will incur a 2% rate, and the existing 5% rate will apply above £250,000.

For example:

• On a £350,000 home, the Stamp Duty you currently pay is £5,000.
• From April 2025, you’ll pay £7,500—an extra £2,500.

For home movers, this increase could influence decisions on whether to upsize, downsize, or stay put.

How Will the Changes Impact Investors or Owners of More Than One Property?

Investors and landlords with additional properties will also see their costs rise. Currently, there’s a 5% Stamp Duty rate on properties priced between £0 and £250,000. From April 2025, this rate will apply only to the first £125,000. Homes between £125,001 and £250,000 will incur a higher 7% rate, and properties priced above £250,000 will see a 10% rate.

For example:

• On a £350,000 property, the current Stamp Duty is £22,500.
• From April 2025, the Stamp Duty will increase to £25,000, calculated across the new bands.

This rise may impact the profitability of buy-to-let investments or second-home purchases and could lead to a slowdown in activity from investors.

What Does This Mean for Buyers and Sellers?

These changes will undoubtedly add additional costs for many buyers, which could impact market activity. If you’re planning to purchase a home or sell your property before April 2025, understanding these changes could help you make more informed decisions.

As always, it’s wise to consult with a professional to ensure you fully understand how these adjustments might affect your individual situation.

If you’re considering buying or selling and would like expert advice, feel free to reach out—we’d be happy to help!