Understanding the Stamp Duty Changes for 2025 and How They Affect You
You may be aware that changes are coming to the Stamp Duty Land Tax in the UK, but how will they impact you? Read this article for more information.
Stamp duty, a tax payable on property or land purchases in England, is currently a hot topic due to impending changes in April 2025. This deadline could significantly impact the housing market, prompting buyers to expedite their completion dates before the changes take effect. If you're in the midst of a sale, this urgency may affect your timeline.
Stamp Duty Land Tax applies whether you are buying with cash or a mortgage. The fee is due to be paid within 14 days of the completion of the purchase and is something that your solicitor will usually do for you. However, there is a link to file the return for yourself online, if needed. It's important to note that there are penalties for late filing, which can be significant. For instance, if you fail to file the return within 30 days of the completion date, you could be charged a penalty of £ 100, with additional penalties if the return is further delayed.
Full information relating to the Stamp duty tax payments can be found at https://www.gov.uk/stamp-duty-land-tax.
From April 1st 2025, the thresholds and amounts payable for Stamp Duty Land Tax will be changing. If you're considering a property purchase in 2025, these changes could significantly alter the amount of tax you'll need to pay. It's crucial to understand these changes and plan accordingly.
The current thresholds for Stamp Duty Land Tax are:
Up to £250,000 Zero
The next £675,000 (the portion from £250,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%
The new rates, as of April 2025, will be:
Up to £125,000 Zero
The next £125,000 (the portion from £125,001 to £250,000) 2%
The next £675,000 (the portion from £250,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%
There are different rates charged depending on your personal circumstances, particularly if you are a
First-time buyer
Already own a property and are buying an additional property
Not a UK resident.
Because everyone's circumstances are different, it is best to use the Government's stamp duty calculator to establish precisely what your liability will be. This can be found by following this link / clicking here. - https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#!/intro
Stamp Duty is not due if you inherit a property in a will, even if you are taking on an outstanding mortgage. However, depending on the value of the estate, there may be an inheritance tax liability, so you should double-check this.
If you received the property as a gift, you would not have to pay Stamp Duty if there is no outstanding mortgage.
If you transfer a property as part of a separation or divorce, neither party will be liable to pay stamp duty.
It's always best to check your liability for Stamp Duty and the payment deadlines. This information is crucial for effective planning and budgeting, ensuring you're prepared for all costs associated with your property purchase.
If you have any questions about buying or selling a property, get in touch with our team today, who are more than happy to help.