As we get ready to wave goodbye to January and our supermarket aisles start to fill up with Easter eggs, we can finally begin to look forward the warmer days of Spring. The weather isn’t the only thing that will be changing as the seasons turn, however. As of April 1, 2025, significant changes to the Stamp Duty Land Tax are set to take effect in England. This is everything you need to know to make sure you’re not caught off guard. 

These changes will affect both first-time buyers and those purchasing additional properties. At Jackson Lees, we know how important these transactions are for our clients. Buying or selling a house is one of, if not the biggest transactions most of us will ever make. So, whether you're a first-time buyer or moving into a new home, staying informed about these changes is essential. Our solicitors are here to guide and support you during this transition, ensuring you are well-equipped to make the right decision when purchasing a property in 2025. 

What is Stamp Duty Land Tax?

Stamp Duty Land Tax (SDLT) is a charge imposed on the purchase of property or land in England and Northern Ireland. The amount of SDLT payable depends on the purchase price of the property and the buyer's circumstances, such as whether they are first-time buyers or purchasing an additional property.

What’s the Current SDLT Framework?

To better understand the upcoming changes, it's important to first grasp the current SDLT framework.

As of now, the nil-rate band threshold, the amount below which no Stamp Duty is payable, is set at £250,000. This threshold was introduced to stimulate the housing market and make it easier for buyers to afford properties. However, this threshold will be reduced significantly from April 1, 2025. 

What are the Key Changes Coming into Effect April 1, 2025?

On April 1, 2025, changes to the Stamp Duty Land Tax (SDLT) rules will affect future property buyers. Understanding these updates will help you make informed financial decisions based on your circumstances. Here are a few key points to consider. 

Reduction of the Nil-Rate Band

Starting April 1, 2025, the nil-rate band for SDLT will revert to £125,000 from the current £250,000. This means that buyers will need to pay SDLT on any property purchase amount exceeding £125,000.

Here’s the SDLT rates that you need to know from 1 April 2025:

• Up to £125,000 = 0% SDLT rate
•  £125,001 to £250,000 = 2% SDLT rate
•  £250,001 to £925,000 = 5% SDLT rate
•  £925,001 to £1.5 million = 10% SDLT rate
• Above £1.5 million = 12% SDLT rate

The impact on First-Time Buyers 

First-time buyers will also see changes in their SDLT relief. The nil-rate threshold for first-time buyers will decrease from £425,000 to £300,000, and the cap on qualifying properties will be lowered to £500,000. This change will particularly affect first-time buyers in high-cost areas such as London.

For instance, a first-time buyer purchasing a property for £625,000 will pay an additional £11,250 in SDLT due to the adjusted thresholds.

It’s important that buyers budget for higher SDLT payments, as it could affect their overall purchasing power. Additionally, first-time buyers may find it more challenging to enter the property market, particularly in areas with higher property prices.

Changes to Additional Property Purchases 

Buyers purchasing additional properties will continue to pay a 3% surcharge on top of the standard SDLT rates. Therefore, it is crucial for those considering buying an additional property to be aware of how the upcoming changes will affect their financial planning and decision making. If you’re planning on purchasing an additional property in 2025, we recommend that you seek professional legal advice on the SDLT changes. 

Advising Clients on SDLT Calculations 

To assist clients in understanding their SDLT liabilities, we recommend using the updated SDLT calculator. This tool will help buyers accurately calculate the amount of SDLT they will need to pay based on the new rates. You can access the You Gov SDLT calculator here.

Strategic Considerations

Given the impending changes, buyers may benefit from completing their property transactions before April 1, 2025, to take advantage of the current thresholds. This consideration could save buyers a significant amount of money in SDLT payments. It is important to note that the average conveyancing transaction can take up to 12-14 weeks to complete. meaning that the likelihood of a new transaction being fully complete by the 1st of April is slim. 

How We Manage Your Conveyancing Transactions

To assist our clients during this busy conveyancing period, we want to explain our process and how we work to ensure your transactions are handled efficiently and effectively.

Completion Dates

Unfortunately, conveyancing transactions are taking longer than they used to. This delay is due to several factors beyond our control. 

These include the time taken to issue your mortgage offer, the speed at which we can obtain search results, and the promptness with which the seller handles our enquiries. As a result, we cannot guarantee specific timescales or meet deadlines for individual transactions. While we understand this can be frustrating, rest assured that our conveyancer’s will do everything possible to move your transaction along promptly.

Priority Order

We ensure a fair and consistent approach to each transaction to ensure that they are dealt with in a timely manner. 

At Jackson Lees we adopt a priority system based on the date we receive contract papers from the seller’s conveyancer (if it is a purchase) and/or the date we issue contract papers to the buyer’s conveyancer (if it is a sale). This system ensures that all transactions are handled systematically and fairly to meet our all our clients' needs. 

Progress Reports

We request that clients allow us to provide updates on progress and to avoid requesting updates more frequently than necessary. This approach enables us to allocate sufficient time to ensure transactions are processed efficiently and smoothly.

Looking forward

The upcoming changes to Stamp Duty Land Tax present challenges for buyers. By staying informed and planning strategically, buyers can navigate these changes effectively, minimising any financial surprises along the way. At Jackson Lees, we are committed to providing our clients with the guidance and support they need to successfully complete their property transactions in a timely manner.

If you’d like to find out how the Jackson Lees Group can support you with a residential conveyancing matter in light of the recent SDLT changes, please give us a call, request a call back or make an enquiry.