Homeowners who move house next year could see their stamp duty bill more than double after thresholds reduce from 1 April.
Based on the average UK house price of £293,000, homemovers could see their stamp duty bill rise from £2,150 to £4,650, according to analysis from Propertymark.
Currently, an existing homeowner who is buying a new property as their main residence does not pay stamp duty on the first £250,000 of their purchase price. For house prices between £250,001 and £925,000, they must pay 5%.
This threshold, along with the nil-rate threshold for first-time buyers, which currently sits at £425,000, was temporarily increased in November 2022. With no mention of any plans to extend the temporary rise or to make it permanent in the Budget, the thresholds will revert to their original levels.
Owners moving home will pay 2% stamp duty from £125,000, while the first-time buyer exemption falls from £425,000 to £300,000.
An intermediary’s guide to understanding client vulnerability
Sponsored by Halifax Intermediaries
Impact on first-time buyers
First-time buyers purchasing homes in London and the South East will be the worst affected by the reduction of the nil-rate threshold.
In London, based on an average property price of £531,212, a first-time buyer household will see its stamp duty bill rise by more than £11,000 from £5,310 to £16,560.
In the South East, based on an average property price of £384,804, first-time buyers are currently exempt from stamp duty, but will pay £4,240 from April.
Many regions won’t see any change, however. First-time buyers in the East Midlands, North East, North West, West Midlands and Yorkshire and the Humber will still pay no stamp duty, based on the average house price for the area.
Movers face steep rise in tax
Based on average house prices per region, those looking to move house will see a typical increase of around £2,500 across many areas.
Movers in the North East and the North West, exempt from stamp duty under the temporary thresholds, will pay £820 and £2,004 from April.
Commenting on the upcoming change to thresholds, Nationwide’s chief economist Robert Gardner suggested it would lead to a jump in transactions in the first three months of 2025, particularly in March. This would likely be followed by a corresponding period of weakness in the following 3-6 months, similar to the period that followed the end of the stamp duty holiday.
Nathan Emerson, chief executive at Propertymark, said: “The Autumn Budget will likely uplift the housing market over the coming months, as people potentially look to complete before any increases on stamp duty come into effect next April. It is, however, important to consider continued house price growth, even in the short to medium term, as overall pricing gains should outweigh any proposed stamp duty increases for the very highest percentage of buyers.”
