Have first-time buyers left it too late to pay lower Stamp Duty? It would appear so.
At present, first-time buyers pay no Stamp Duty when buying a home worth £425,000. However, from 1 April, Stamp Duty thresholds will return to pre-2022 levels, meaning the tax-free threshold for first-time buyers drops from £425,000 to £300,000, resulting in sharply higher costs. From 1 April, buying a home worth £425,000 will now cost first-timers £6,250 in stamp duty.
The new thresholds being introduced include reducing ‘first-time buyers’ relief’ – which lets buyers pay Stamp Duty at a reduced rate – which will be revised from the current £625,000 level back to the pre-2022 level of £500,000. This means the Stamp Duty a first-time buyer can expect to pay on a £625,000 home will rise from £10,000 at present to £21,250, an increase of £11,250.
Is there still time to complete before the increase?
Any first-time buyers hoping to complete their house purchase before the rises are cutting it close. The average time it takes to complete a house purchase is between 12 and 16 weeks and often takes longer. First-time buyers currently in the process of completing a house purchase should therefore consider making plans to pay Stamp Duty at the higher amount if their completion date is later than 31 March.
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