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What does the Stamp Duty relief cut mean for first-time buyers?

The recent changes to Stamp Duty Land Tax (SDLT), announced in the Autumn Budget will impact upon all purchasers looking to buy properties valued at more than £250,000.

The reduced threshold of £125,000 will impact upon ALL purchases over £250,000. For purchases over £250,000 there will be another £2,500 Stamp Duty Land Tax to pay on top of the current rates.

If you’re currently in the process of purchasing a property or planning to do so soon, it’s important to consider whether these changes will affect you.

The SDLT changes will also have significant implications for first-time buyers looking to enter the property market.

Our Chartered Legal Executive, Becky Cutting, is here to explain the upcoming changes and what they mean for those looking to buy their first home.

What’s changing?

In April 2025, the Government will reduce the SDLT threshold for first-time buyers from £425,000 to £300,000. Additionally, the maximum value for which the First-Time Buyer’s Relief can be claimed will drop from £625,000 to £500,000.

While the changes may seem concerning, research by finder.com indicates that the average house price for a first-time buyer in the UK in 2023 was £288,136. This suggests that most first-time buyers will still fall below the new SDLT thresholds and remain largely unaffected by the change.

However, if you’re planning to buy in more expensive areas, such as London, these changes could impact your potential savings.

How should first-time buyers prepare?

If you’re currently in the process of purchasing a property or planning to do so soon, it’s important to consider whether these changes will affect you.

“One key strategy is to look at properties early in the New Year to ensure that you complete your purchase before 1 April 2025, when the new SDLT rates come into effect.

“By doing so, your purchase will be subject to the current rates, which may offer significant cost savings,” says Becky.

Additionally, it’s advisable to have a clear understanding of your expected SDLT costs before making an offer on a property.

This way, you can ensure your budget accounts not only for the Stamp Duty but also for other essential expenses, such as conveyancing and moving fees.

For expert advice on purchasing a residential property, contact our Solicitors.