Stamp Duty Changes To Harm UK Homebuyers

UK homebuyers face higher taxes from March 2025 as threshold lowers from £250,000 to £125,000, raising costs for both general and first-time buyers.

As Tory leadership candidate James Cleverly outlines plans to scrap stamp duty land tax (SDLT) altogether, it is expected that next month's Autumn Budget will confirm scheduled changes to SDLT thresholds. From March 2025, the stamp duty threshold will decrease from £250,000 to £125,000, increasing the tax on an average home from £2,768 to £5,268. This change will affect both general homebuyers and first-time buyers, the latter currently paying no stamp duty on properties up to £425,000. This threshold reduces to £300,000 in April 2025, meaning first-time buyers will pay £8,750 on a £425,000 property.

Cornerstone Tax’s latest research confirms that 44% of buyers say that they cannot live in their desired location because of increased house prices in the community, supporting first-time buyers should be a must for the new government. Despite stamp duty generating around £13 billion annually, a temporary cut in 2022 caused receipts to surge to £17.5 billion. David Hannah suggests that keeping the existing stamp duty thresholds would further stimulate the property market, and by extension, the national economy.

Currently, homes valued at £250,000 or less are exempt, while those valued between £250,000 and £925,000 face a 5% levy. With the average UK home priced at £285,201, it’s clear that these thresholds are overdue for a review. Furthermore, Hannah argues that adjusting these bands would not only boost sales for first time buyers, but also benefit pensioners looking to move up the property ladder. By increasing demand for mid-to-high-end properties, this would create a ripple effect, enabling current homeowners to sell their lower-end properties and invigorating Britain’s stagnant housing market.