Housebuilder David Wilson Homes South-West is advising buyers looking to move in 2025 to consider doing it now to avoid the rise of stamp duty fees from April.
Currently, home buyers don’t have to pay land tax on properties up to the value of £250,000. However, stamp duty will be introduced on properties worth more than £125,000 from 1 April 2025. Home buyers will pay 2% on the portion between £125,000 and £250,000 and 5% on the portion between £250,001 and £925,000. The change could mean a significant increase in costs for those moving up the property ladder.
David Wilson Homes South-West also surveyed 500 prospective buyers and found that:
· More than a third (36%) admitted they weren’t aware of the changes at all
· 38% had heard about the changes but lacked detailed knowledge
· Only a quarter (26%) stated they were fully aware
The survey also revealed mixed opinions about the fairness of the new thresholds, with more than a fifth of respondents (22%) unsure about the changes and others expressing concerns that the measures don’t go far enough.
As noted on Gov.uk, stamp duty on a property worth £295,000 would see home buyers taxed £2,250 for the move if it’s completed on or before 31 March 2025. From 1 April 2025, the Stamp Duty on a property with the same value would be £4,750.
Breaking this down further, Stamp Duty on a property worth £550,000 would increase from £15,000 to £17,500 after March, which might mean house hunters have to compromise on their dream home.
David Wilson Homes South West spoke to Terry Higgins, mortgage expert and Group MD of TNHG New Build Mortgages, who shares his advice to all prospective buyers.
Terry said: “The upcoming stamp duty changes could have a big impact on buyers. The temporary increases to thresholds that were put in place in September 2022 will come to an end impacting everyone planning to move, particularly those taking their first step on the property ladder or moving to a new home.
"For first-time buyers, the re-introduction of tax on properties over £300,000 means they’ll need to budget for higher costs, which could make it harder to afford their ideal home.
“For existing homeowners and downsizers, the increased rates could mean paying thousands more in tax, especially in areas where property prices are higher. However, there’s still an opportunity to avoid these extra costs by completing a purchase before the changes come into effect on 1st April.
“Acting now could save buyers thousands, and it’s a great time to explore properties that are ready to move into ahead of the deadline. Seeking advice and planning carefully will ensure buyers make the most of the options available to them.”
One such property is the three-bedroom Hadley at plot 54 at Buckley Gardens in Melksham which is ready for immediate occupation. Buyers who complete by 31 March 2025 – before the hike - can save up to £4,250 in stamp duty fees. This home also features an upgraded kitchen and flooring worth almost £11,000.
Barratt Homes and David Wilson Homes in partnership with Swindon Borough Council, are currently building the Wichelstowe development in Swindon, and will deliver 3,000 new homes along with new schools and community facilities.
The 250-hectare site on the southern edge of Swindon will include extensive open spaces, nature conservation areas, playing pitches and allotments.
Barratt David Wilson Homes South-West is currently building at Orchards Rise and will launch a new phase at Canalside in early 2025.
Potential buyers can register to receive updates at www.dwh.co.uk.
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