Stamp Duty Land Tax changes for First Time Buyers

Following recent spring budget announcement there is no significant changes to stamp duty land tax for first-time buyers or downsizing individuals.

If you are a first time-buyer, SDLT will only be payable on residential properties over £425,000 (if the property is worth £625,000 or less). 5% SDLT will then be payable on the portion from £425,001 to £625,000. If the property you are buying is worth over £625,000.00 you will pay the standard rates of Stamp Duty and will not qualify for first-time buyer’s relief.

The standard rates are:

•           0% on the first £250,000.00 paid (this includes shared ownership properties if the share is under £250,000.00)

•           5% on the property price between £250,001.00 and £925,000.00

•           10% on the property price between £925,001.00 and £1,500,000.00

•           12% on the property price of £1,500,001 and over

It is worth mentioning that from 31 March 2025, SDLT rates will return to their previous levels.

The nil-rate threshold at which property buyers in England begin to pay SDLT is currently £250,000. From 31 March 2025, this is intended to return to £125,000.00.   For first-time buyers the threshold currently at £425,000.00  is also intended to return to its previous level of £300,000,00. The maximum purchase price for which First Time Buyers’ Relief can be claimed, will revert to £500,000.00 from the current £625,000.00.

As per the new spring budget, from 1 June 2024 Multiple Dwellings Relief will be abolished.

For contracts exchanged on or before 6 March 2024 MDR can still be claimed, regardless of when completion takes place, given the contract is not varied after that date.

Transactions that take place after MDR is abolished cannot be treated as linked to earlier transactions where tax was calculated in line with the MDR rules.

If you are a First Time Buyer and are looking to buy your first property or have any questions about Stamp Duty, please contact a member of our Johnson Astills Conveyancing Team on 0116 255 4855 or 01509 610 312 who will be happy to assist.