From 1st April 2025, the Stamp Duty Land Tax (SDLT) rates will rise and increase the homebuying cost by thousands of pounds more. The exact increase will depend on the property value and the buying purpose, but the changes could be summarised into the following:

• 0% thresholds will drop for main residences (from £250,000 to £125,000) and first-time homebuyers (from £425,000 to £300,000) – anything beyond these values will pay stamp duty land tax
• First-Time Buyers Relief that gives lower stamp duty rates will drop from £625,000 to £500,000
• Buying additional properties (valued from £125,000 to £250,000) will incur a higher stamp duty of 7%, up from 5%

This means up until March 31, 2025, a first-time homebuyer of a £425,000 property will be exempt from paying stamp duty land tax. But if they fail to meet the deadline, the purchase will be subjected to a 5% stamp duty land tax increase.
 
How to Save Money Ahead of the Stamp Duty Land Tax Increase

The good news is there’s still time for you to avoid this additional expense. Instead of paying more taxes, you can save big and use the money to decorate your new property or invest in another asset.

If you want to save money ahead of the SDLT rate increase, here are 5 things you can do.
 
Act now

The SDLT changes will take effect on April 1, 2025, so time is of the essence. You need to act now and complete the home-buying process by March 31, 2025. Talk to your estate agent and tell them of your intention to beat the SDLT deadline.
 
Negotiate the price

Consider the SDLT thresholds and negotiate with the seller to keep the purchase price within certain brackets. For instance, if the property is £310,000, negotiate for a £300,000 sale price. If the seller agrees, you’ll be exempt from paying SDLT fees.
 
Use the Lifetime ISA

The Lifetime ISA (Individual Savings Account) is a dual-purpose tax-free savings account. It can be used for retirement purposes or for buying your first home.

You can contribute up to £4,000 each year to this savings account as long as you’re between the ages of 18 to 40. The government will add 25% to your savings (with a maximum of £1,000 every year).

As long as you make your first contribution between the age range, you can use your Lifetime ISA to pay for your first home purchase.
 
Be Ready for Additional Costs

In case you’re not confident the purchase will be completed before the deadline, be ready to pay additional costs. Adjust your financing plans accordingly to account for the possibility of paying higher SDLT rates. Try to minimise delays and prepare your documents and funding so you can complete the purchase as early as you can.
 
Work with Efficient Professionals

Look for professionals who focus on expediting the process so you can complete an exchange in time. Oftentimes, companies offer specific services in response to major changes like the SDLT increase. For instance, Muve offers a faster conveyancing service that specifically focuses on helping homebuyers complete an exchange before the SDLT increase deadline. By using accelerated services, the transaction can be processed efficiently while minimising delays and risks.
 
Common Questions About the SDLT Changes

One of the best ways to save on your property purchase is by understanding the changes that will happen after the SDLT rate increase takes effect.

Take a look at the common questions asked about the coming stamp duty land tax increase.
 
What is stamp duty?

Stamp Duty Land Tax is the tax paid for properties purchased in England and Northern Ireland. This fee depends on the property sale price, type and buying circumstances (e.g. first-time buyer, investor, etc.)
 
Why are the stamp duty thresholds changing?

With property prices continuing to rise, homebuying affordability became an issue for UK residents. In September 2022, the Conservative Government decided to temporarily lower thresholds to make homeownership more affordable. This temporary change will end on March 31, 2025.
 
Who is affected by the SDLT changes?

There are three types of property buyers affected by the SDLT increase.

The first is the first-time buyers. The 0% threshold will drop from £425,000 to £300,000 and relief limits will change from £625,000 to £500,00.

The second is home movers. These are the homebuyers who will use the property as their main residence. The SDLT rates for properties valued at £125,001 to £250,000 will go from 0% to 2%.

The third is multiple property investors. Additional properties will pay an SDLT rate of 7% (up from 5%) for properties valued at £125,0001 to £250,000.
 
Save Big on Tax by Beating the SDLT Deadline

The Stamp Duty Land Tax is a necessary payment to complete a property-buying process. The upcoming increase in rates presents challenges that you can overcome if you act now. Planning the home-buying process and staying updated on the looming changes allows you to leverage the right tools to save big on tax payments.

Don’t let the SDLT increase compromise your property goals. Protect your investment journey by staying ahead of the SDLT changes.

Whether you’re looking to save thousands of pounds in tax payments, or you simply wish to move into a new home soon, Muve is offering a quick and efficient conveyancing process to help beat the March 31, 2025, deadline. The fast upgrade option combines innovative technology, a dedicated team of experts and proactive case management to ensure a smooth and timely exchange for homebuyers.

If you wish to save thousands of tax payments, instruct us before February 21st, 2025 (for Freehold properties) or January 31st, 2025 (for Leasehold properties). Find out more about our conveyancing services.