The last few months have been a case of changes, u-turns, and more changes for the UK taxation system. One change that was put in by Kwasi Kwarteng in his short lived mini budget, was a change to stamp duty rates. This meant that rates were cut for a significant number of transactions (see link for details). However, in the Autumn Statement made yesterday by the new chancellor, Jeremy Hunt, a stamp duty cut end date was announced.
Mr Hunt had promised that he would keep the stamp duty cut for the time being, but in the Autumn Statement he set out the reduction back to standard rates which would take place with effect from 31st March 2025.
In his statement he said: “The OBR expects housing activity to slow over the next two years, so the stamp duty cuts announced in the mini-budget will remain in place but only until March 31, 2025.”
This will obviously mean that there will be a rush to get property transactions completed before the cut off date. It is likely that purchases will need to be agreed before Christmas 2024 in order to take advantage of the lower rates, if the experience of the stamp duty holiday a few years ago is anything to go buy. Solicitors were inundated with work and there were long waiting times to complete purchases.
The current stamp duty rates have essentially removed the 2% tranche for purchase values between £125,000 and £250,000, which decreases the amount of stamp duty that is payable on properties above £250,000 by £2,500 (250,000 – 125,000 * 0.02). This change will be reversed in 2025.
When stamp duty rates revert to the old amounts on 1st April 2025, the previous starting threshold of £125,000 will come back into play and there will be 2% payable on the segment between that and £250,000. Above that the current rates apply.
All this can be quite confusing so if you just want to know how much you will have to pay on a current purchase, then check out our stamp duty calculator.