The stamp duty thresholds are changing in England and Northern Ireland from next week
Homebuyers in England and Northern Ireland are set to face a significant hike in costs as stamp duty thresholds are due to change next week. The tax, which is levied on property purchases above a certain value, will see its threshold lowered from £250,000 back to £125,000 starting April 1, a temporary increase that was introduced in September 2022.
According to Coventry Building Society’s latest findings, the stamp duty payable on an average-priced home in England will soar from £2,028 to £4,528 with the updated thresholds.
For those purchasing their first home, different rules apply. Currently, first-time buyers in England and Wales begin paying stamp duty on properties valued over £425,000, but this will decrease to £300,000 from April 1, reports the Mirror.
Jonathan Stinton, Coventry’s head of intermediary relationships, commented on the impending changes: “The upcoming changes to stamp duty mean home movers across England will soon be paying thousands more when they buy their next home. Right now, someone buying an average priced home in the northern parts of the country won’t pay a penny in stamp duty – but from 1st April buyers across the country will have to find up to £2,500 extra just to cover the tax.
“Many buyers will have to stretch their savings, reduce their deposit, or even borrow more on their mortgage to cover the tax hike. That’s why it’s so important for buyers to factor in the new thresholds when planning their next move, and to seek advice on how best to manage their budget in light of these changes.”
You must settle your stamp duty within a fortnight of completing a property purchase. Your solicitor can assist with the payment, or you can handle it yourself online.
It’s also an option to add the stamp duty cost to your mortgage, subject to your lender’s approval – but be aware that this could impact your loan affordability and result in higher interest repayments over the long term due to the increased borrowing. Note that Wales and Scotland have distinct stamp duty systems.
The cost of stamp duty
Starting from April, the following figures illustrate the additional stamp duty payable by homebuyers in England based on average regional house prices.
Below are the current stamp duty rates for England and Northern Ireland, which are set to stay until 31 March 2025:
- For properties up to £250,000 (£425,000 for first-time buyers), the main residence rate is 0%.
- For properties between £250,001 and £925,000, the main residence rate is 5%.
- For properties between £925,001 and £1,500,000, the main residence rate is 10%.
- For properties over £1,500,000, the main residence rate is 12%.
Here’s how stamp duty rates will alter in England and Northern Ireland from 1st April 2025:
- For properties up to £1250,000 (£300,000 for first-time buyers), the main residence rate is 0%.
- For properties between £125,001 to £250,000, the main residence rate is 2%
- For properties between £250,001 and £925,000, the main residence rate is 5%.
- For properties between £925,001 and £1,500,000, the main residence rate is 10%.
- For properties over £1,500,000, the main residence rate is 12%.
At present, first-time buyers enjoy reduced stamp duty rates only if they purchase a property valued at £625,000 or less. This threshold will be lowered to £500,000 from 1st April.
