Though there may yet be a late reprieve – which doesn’t seem likely, according to predictions for the upcoming Spring Forecast – the cost of purchasing a property in England or Northern Ireland will be going up from 1st April 2025 due to increasing Stamp Duty Land Tax (SDLT).
Now the temporary nil rate threshold increase to £250,000 has reverted to the pre-September 2022 level of £125,000 and discounts for first-time buyers have also been reduced to previous levels, those purchasing property after the end of March will face higher Stamp Duty costs.
Here’s what’s in store for landlords and first-time homebuyers in England and Northern Ireland.
SDLT for landlords
As we reported earlier this year, Stamp Duty for landlords is due to increase in April.
Anyone purchasing a property that costs £250,000 or above will face an additional £2,500 expense, as more of the purchase price will be subject to the 2% tax charge when the nil rate threshold is reduced.
For landlords, however, this comes in addition to the 2% surcharge increase introduced on 31st October 2024. As an example, while SDLT on a £350,000 property would have been £15,500 before the end of October 2024, it would currently be £22,500 – and will jump to £25,000 from April 2025.
This marks a Stamp Duty increase of over 60% for landlords in the space of just six months.
SDLT for first-time buyers
Due to temporary discounts for first-time buyers, those purchasing their first property in England and Northern Ireland do not have to pay SDLT on properties up to £425,000.
This means that current purchases between £425,000–£625,000 only incur a charge of 5% above this threshold, while no relief is available for properties costing more than £625,000.
However, these thresholds will be reduced from April 2025, with the nil rate cut to £300,000 and the upper limit dropping to £500,000. The 5% rate will apply to property purchases between these limits.
Therefore, anyone purchasing a property worth just over £500,000 will need to negotiate the price, as even a £1,000 reduction on a £500,000 property sale will save the buyer £5,050 in SDLT.
Stamp Duty tax advice
Property buyers in England and Northern Ireland should aim to complete transactions before 1st April 2025 or prepare for increasing Stamp Duty costs – especially landlords.
Scotland and Wales have their own property taxes, but for buyers in England or Northern Ireland, an online Stamp Duty calculator is available to help you work out the amount of SDLT payable.
If you would prefer to seek professional assistance with property tax matters, why not contact our team of accountants in Barnsley to benefit from our tax-efficient financial services?
For advice on Stamp Duty Land Tax, simply call gbac on 01226 298 298, or send an email to info@gbac.co.uk with your details and we will be in touch to discuss your tax situation.