How stamp Duty Affects Your Next Purchase

Stamp duty is a major consideration when buying a home, and upcoming changes in April 2025 could significantly impact both first-time buyers and home movers. Understanding these adjustments can help you plan effectively and avoid unexpected costs.

What’s Changing?

Currently, first-time buyers benefit from a stamp duty exemption on properties valued up to £425,000. For properties priced between £425,001 and £625,000, they pay a reduced rate of 5% on the portion within this range. However, as of 1 April 2025, these thresholds will drop:

• No stamp duty for properties up to £300,000 (down from £425,000).
• 5% tax on the portion between £300,001 and £500,000.
• Properties above £500,000 will no longer receive any first-time buyer relief.

How Much More Will You Pay?

These changes mean that buyers purchasing homes above the new thresholds will face significantly higher costs.

Here are a few practical examples:

• A £411,900 home in London – Currently stamp duty-free for first-time buyers, but from April 2025, buyers will need to pay £5,595.
• A £327,700 home in Bath – Currently tax-free, but will cost £1,385 in stamp duty.
• A £625,000 property today – Would attract a £10,000 stamp duty bill. From 1 April 2025, the same property will be taxed at £21,250, an increase of £11,250.

What Does This Mean for Homebuyers?

Increased Costs – Many buyers will need to budget for higher stamp duty payments, particularly in regions with high property prices.

Increased Market Activity – There has already been a rise in buyer demand, especially in London and the South East, as people rush to complete purchases before the changes take effect.

Longer Completion Times – The average property transaction in the UK takes 151 days to complete. If you want to buy a property in 2025, you will most likely fall under the new stamp duty changes.

How to Prepare for the Changes

• Assessing your financial position – Knowing how much you could borrow will help set realistic expectations. There are government schemes designed to assist buyers, such as the Mortgage Guarantee and Own New Rate Reducer schemes.
• Secure a mortgage in principle – This strengthens your position when making an offer and speeds up the buying process. This can strengthen your position when negotiating!
• Work with a mortgage adviser – A professional can help you explore the best financing options and navigate the stamp duty changes effectively.

Seek Professional Guidance

Navigating stamp duty changes can be complex, but you don’t have to do it alone. Windsor Hill Mortgages offers expert guidance to help you make informed financial decisions. Our experienced advisers in Bath can guide you through every step, from securing your mortgage to finding the right protection for your home.

Speak to our team today and we'll take you through your mortgage options.