With possible changes to stamp duty in 2024, many potential house buyers are left wondering what they should expect. Here, we will explore whether stamp duty will change in 2024 and its potential impact on house buyers.
Government Statements
In the autumn statement last year, the Government announced that the Stamp Duty cuts introduced by the previous Government in September will not be permanent. Chancellor Jeremy Hunt said that he will “sunset the measure” from 31 March 2025. SDLT rates will then return to their previous levels.
As a result of his predecessor Kwasi Kwarteng’s ‘mini budget’, the SDLT nil-rate threshold (at which property buyers in England and Northern Ireland begin to pay SDLT) is currently £250,000. From 31 March 2025 this will return to the previous level of £125,000, in place prior to 23 September 2022.
The nil-rate threshold for first-time buyers (at which first time buyers in England and Northern Ireland begin to pay SDLT), currently £425,000, will return to its previous level of £300,000. As will the maximum purchase price for which First Time Buyers’ Relief can be claimed, reverting to £500,000 from the current level of £625,000.
What Is Stamp Duty Land Tax?
Stamp Duty is a tax you usually pay when buying residential property or a piece of land in England or Northern Ireland over a certain price.
You will pay Stamp Duty on residential properties costing more than £250,000, unless you qualify for first-time buyers relief.
If you’re an eligible first-time buyer, you will pay no Stamp Duty on properties costing up to £425,000. You’ll get a discounted rate on property purchases up to £625,000.
This tax applies to both freehold and leasehold properties – whether you’re buying outright or with a mortgage.
If you’re buying a property in Scotland, you will pay Land and Buildings Transaction Tax (LBTT). In Wales Land Transaction Tax (LTT) instead of Stamp Duty.
How Is Stamp Duty Calculated?
SDLT is calculated on a graduated scale. The more pricey the property, the higher the rate of SDLT you’ll pay. Do you know who else might be interested? First-time buyers! SDLT relief is available for the first home you purchase. Just be aware, purchasing additional houses may incur a 3% surcharge.
The SDLT rates and calculations below apply until 30 March 2025.
| Up to £250,000 | 0% |
| The next £675,000 (the portion from £250,001 to £925,000) | 5% |
| The next £575,000 (the portion from £925,001 to £1.5 million) | 10% |
| The remaining amount (the portion above £1.5 million) | 12% |
Use Our Stamp Duty Calculator to work out how much stamp duty you will pay.
What Are The Potential New Changes?
The UK Government has stated that it plans to replace stamp duty with an annual property tax based on property value. The change is not expected to happen until 2024, and it’s unclear how it will affect homeowners and property buyers. However, it is generally expected to be more beneficial to first-time buyers and those purchasing lower-priced properties. It thought that these buyers will pay less tax than they currently do under the current stamp duty system.
It’s also important to note that the proposed changes are not set in stone. There could be amendments made before the new system is introduced in 2024. Potential house buyers should stay up-to-date on any developments related to stamp duty and research.
The situation provides a degree of certainty in the medium term and offers good news to anyone considering purchasing a property in the near future, particularly first-time buyers.
If the changes proposed for 2025 do proceed as planned, the market and everyone involved will have plenty of time to prepare, unlike with other measures announced more suddenly in the past two years.
Our Stamp Duty Calculator will work out how much stamp duty you will owe on any type of property purchase..
Find Our Stamp Duty Calculator HERE
