UK households may incur an additional £2,000 charge soon due to a stamp duty rule change by Labour, affecting homebuyers significantly.
London: Households in the UK are facing a £2,000 extra charge soon. This comes after a change in stamp duty rules by Labour.
Chancellor Rachel Reeves announced in the Autumn Budget that stamp duty rates will return to previous levels starting April 2025. This means higher costs for first-time buyers and current homeowners looking to move.
In September 2022, the Conservative government raised the thresholds for stamp duty. This was to help lower upfront costs when moving. However, this temporary increase ends on March 31 this year.
After this date, any property transactions will be subject to the higher stamp duty rates. This change could lead to thousands of pounds in extra costs for homebuyers.
For example, if you buy a house for £295,000 in April 2025, your stamp duty will be calculated as follows:
- 0% on the first £125,000 = £0
- 2% on the next £125,000 = £2,500
- 5% on the final £45,000 = £2,250
- Total stamp duty = £4,750
Data from Zoopla shows that first-time buyers in some areas may see increases of up to £11,250. Those buying a second home could face an average increase of around £2,000.
If you already own a home and plan to move after April, expect to pay about £2,000 more than if you moved before the end of March.
The new stamp duty rates from April 1, 2025, are as follows:
- Up to £125,000 – Zero tax
- The next £125,000 (from £125,001 to £250,000) – 2% tax
- The next £675,000 (from £250,001 to £925,000) – 5% tax
- The next £575,000 (from £925,001 to £1.5 million) – 10% tax
- Above £1.5 million – 12% tax
For comparison, if you buy a house for £295,000 before March 31, 2025, your stamp duty will be:
- 0% on the first £250,000 = £0
- 5% on the final £45,000 = £2,250
- Total stamp duty = £2,250
After April 2025, the same purchase will cost you £4,750 in stamp duty. That’s an increase of £2,500.
With the deadline approaching, property expert Owen Rogers from Zoopla advises buyers to act quickly. If you start by February, you might avoid the extra costs.
He suggests confirming your mortgage offer early and choosing the right conveyancer. This can help speed up the process and save you money.
Rogers explains that confirming your mortgage early helps avoid delays. Many buyers start the process without knowing their financial situation, which can slow things down.
He recommends working closely with your financial advisor or mortgage broker. Having everything ready from the start ensures a smooth process once you make an offer.
Choosing an experienced conveyancer is also crucial. A good conveyancer can help meet deadlines and make the process easier.
Using Zoopla’s free conveyancing service can help you find a trusted conveyancer quickly. It takes just 60 seconds and includes a money-back guarantee.
