Homebuyers in England and Northern Ireland are bracing for a steep increase in costs as the stamp duty thresholds are set to revert next week. The tax, imposed on property purchases exceeding a specific value, will see its threshold drop from £250,000 back to £125,000 starting April 1, reversing a temporary hike introduced in September 2022.
Coventry Building Society’s recent research indicates that the stamp duty payable on an average-priced home in England will jump from £2,028 to £4,528 due to the revised thresholds.
First-time buyers face different regulations. At present, first-time buyers in England and Wales start paying stamp duty on properties over £425,000, but this figure will fall to £300,000 from April 1.
Jonathan Stinton, head of intermediary relationships at Coventry, has voiced his concerns about the imminent 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 two weeks of completing a property purchase. You can get help from your solicitor to make the payment, or you can do it yourself via an online process.
It is possible to add the cost of stamp duty to your mortgage balance if your lender agrees – but remember this can affect your loan affordability and may result in more expensive interest repayments over time due to the higher borrowed amount. Bear in mind that Wales and Scotland have separate stamp duty systems.
The cost of stamp duty
From April onwards, the increased stamp duty payable by homebuyers in England is illustrated by the following figures, which are based on average regional house prices. Here are the existing stamp duty rates for England and Northern Ireland, expected to remain unchanged 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.
