First-time buyers face a potential £6,250 tax hike unless changes are announced in the upcoming Autumn Budget.
Currently, first-time buyers pay no stamp duty on properties up to £425,000, however the threshold is set to drop to £300,000, potentially adding thousands to the cost of purchasing a home.
Zoopla’s research revealed that from April 1, 2025, a first-time buyer purchasing a £425,000 property will face a £6,205 tax bill, compared to paying nothing today.
This looming change has sparked concern among industry experts, who fear it may have been overlooked by many prospective buyers.
Michelle Lawson, Director at Lawson Financial, warned: “Amid the noise of falling mortgage rates, the Stamp Duty cliff edge appears to have been forgotten.
First time buyers could see their SDLT bills go from £0 to £6,250
GETTY
“For a first-time buyer, if they purchase a property up to £425,000, it’s currently nil SDLT, which will become £6,250 from April 1. That is a massive difference of £6,250 in tax payable.”
The impact will be most severe in Southern England, the South East, and the East of England.
This change is expected to affect a third of first-time buyers in England, who will pay more stamp duty from April next year than they do today.
Kim McGinley, director at VIBE Finance, said: “We’re already seeing a push from those looking to beat the March 31 deadline, especially with uncertainty surrounding the upcoming Budget.”
Stephen Perkins, Managing Director at Yellow Brick Mortgages, added: “This could have a substantial impact on the financials of many home moves and could apply the brakes to the property market train.”
These expert opinions underscore the potential market disruption and the need for buyers to act swiftly.
Zoopla warned that buyers have roughly two months left to find a property and have their offer accepted to avoid the SDLT increases.
This urgency is due to the average property sale taking 25 weeks from listing to completion, according to the property portal.
As the Stamp Duty deadline approaches, experts advise caution and preparation.
McGinley continued: “I’d advise buyers to stay informed, but not to make rushed decisions until we have clearer details on what the Budget will actually deliver.”
Izabella Lubowiecka, senior property researcher at Zoopla, said: “Those not looking to purchase until after April 1, should make sure they build the additional stamp duty fees into their plans and account for it in their overall budgets.”
The impact of these changes could be far-reaching. Stephen Perkins warned that with the Government looking to save money, it’s unlikely they will announce a reprieve to these forthcoming changes.
Ultimately, prospective buyers, especially first-time buyers, are urged to carefully consider their options and timing in light of these impending Stamp Duty increases.