From VAT on private school fees to an increase in Capital Gains Tax has risen — the autumn Budget 2024 revealed a lot of changes.
But one thing Chancellor of the Exchequer Rachel Reeves didn’t change, is the current Stamp Duty relief deadline for first time buyers, which is due to end on March 31st 2025.
“We saw an increase in Stamp Duty charges for second home owners, rising from 3% to 5%, but nothing was mentioned about the Stamp Duty Relief for first time buyers” mortgage adviser Jo Jingree from Mortgage Confidence says.
“This means time is ticking and first time buyers have just under five months left to take advantage of the Stamp Duty relief deadline. Completing before March’s deadline could save those buying their first home thousands of pounds.”
But first, remind me: what is Stamp Duty?
Stamp Duty, which is more formally referred to as Stamp Duty Land Tax (SDLT), is a tax paid by people buying properties.
The amount you pay depends on a few things, like where you are in the UK, the price of the property, whether you are a multiple home owner, first time buyer or if you are purchasing as an individual or business.
So, what is the temporary Stamp Duty Relief for first time buyers?
During the mini Budget on 23rd September 2022, then Chancellor Kwasi Kwarteng introduced changes to SDLT on a standard residential purchase.
This saw the threshold at which buyers have to pay stamp duty rise from £125,000 to £250,000. This means residential buyers won’t pay any stamp duty if their home is priced at £250,000 or under.
While the threshold for first time buyers was temporarily increased from £300,000 to £425,000. This means, until March 31st 2025, as long as the total property price is below £625,000, first time buyers won’t pay stamp duty on the first £425,000. However, if the property price exceeds this, first time buyers will pay a 5% Stamp Duty rate on the remaining amount, up to £200,000.
So, at present, the maximum purchase price for which First-Time Buyers Relief can be claimed is currently £625,000. But this will return to the previous level of £500,000 on March 31st 2025.
“So come March 31st 2025, those selling their home and buying their second will also be hit by the new Stamp Duty changes that come into play,” Jo explains. “But, it will be first time buyers who will feel the impact the most, as they have the biggest threshold jump.”
The current stamp duty rates for first time buyers
| Property purchase price bands for first time buyers | Stamp duty rates |
| Up to £425,000 | 0% |
| £425,001 to £625,000 | 5% |
If the price is over £625,000, you cannot claim the First Time Buyer stamp duty relief. You’ll need to follow the rates for a single property (listed here).
Stamp Duty changes for first timer buyers on March 31st 2025
| Property purchase price bands | Stamp duty rates |
| Up to £300,000 | 0% |
| £300,001 to £500,000 | 5% |
If the price is over £500,000, you cannot claim the relief. So you’ll need to follow the rates for a single property (listed here).
Given that the average first time buyer’s home in London costs £492,234. Completing ahead of the deadline would mean you pay £3,362 instead of £9,612.
Who counts as a first-time buyer?
You are a first-time buyer if:
- You’re purchasing your only or main residence, and
- You’ve never owned a freehold or have a leasehold interest in a residential property in the UK or abroad.
Is there still time to cash in on the lower Stamp Duty threshold?
“Well, it all depends on how quickly it takes to complete on your property and where you are in the process,” Jo says.
The average residential property transaction takes around 12 weeks to complete, but in certain circumstances it can take much longer.
“So it’s tight, but it could be doable,” Jo says. “However, anyone who is starting the home buying process from scratch, should know that they are at risk of not completing before the March 31st 2025 deadline, so should budget for this.”
Is 2025 the year you get on the ladder?
While the average residential property transaction takes around 12 weeks to complete, an average mortgage application can take 2-6 weeks—but the timeframe may vary depending on the lender.
If you’re a first time buyer and looking for a mortgage, contact award-winning mortgage adviser, Jo Jingree, who has more than 20 years’ experience in the industry. Jo recognises that everyone is different. So she will always try to find a solution, even to the most complex of issues.
To help take the stress out of the mortgage process, email, call or WhatsApp Jo on 07742 228302.
There may be a fee for mortgage advice. The precise amount will depend upon your circumstances, but we estimate it will be £399. Your home may be repossessed if you do not keep up repayments on your mortgage.
Please be aware that by clicking on to some of the above links you are leaving the Mortgage Confidence Ltd website. Please note that Mortgage Confidence Ltd nor HL Partnership Limited are responsible for the accuracy of the information contained within the linked site(s) accessible from this page.