Stamp Duty Land Tax (SDLT) is set to increase from April 1, affecting all buyers, especially first-time buyers.
This change comes as the temporary threshold increases, introduced in September 2022, are set to end.
Currently, first-time buyers are exempt from paying stamp duty on homes valued up to £425,000.
From April 1, this threshold will be reduced to £300,000, resulting in a new stamp duty charge of £6,250 for these buyers.
The nil-rate threshold, currently set at £250,000, will revert to its previous level of £125,000.
Stamp Duty Land Tax, or stamp duty, is a tax that the property buyer must pay as a lump sum at the time of completion if the property or land exceeds a specified price range.
The amount owed in SDLT is determined by various factors, including whether the buyer is a UK resident, purchasing as an individual or a company, a first-time buyer, replacing their main home, or acquiring additional property.
In September 2022, the Conservative Government introduced a temporary adjustment to stamp duty, aimed at reducing the initial costs associated with moving home.
The objective was to bolster the housing market, support related jobs and businesses, and assist first-time buyers in taking their first step onto the housing market ladder.
Although this initiative was initially presented as a permanent change, during the Autumn Statement of 2022, the Government declared that the increase in the residential nil-rate threshold would end on March 31.
Based on the purchase of a freehold, residential property bought by a UK single property owner, the new stamp duty increases will add between £500 and £2,500 to the price of a property up to £700,000.
H&H Land & Estates property valuer Grace Oakley said: “The changes aren’t huge and certainly won’t make a substantial difference as perhaps the media is suggesting, but they will certainly give buyers an incentive to purchase before the 1st April deadline.”