ARTICLES

April 2025

By Lucy Owen, Director of Owen Paulo and head of Resales

As seen in the April/May 2025 edition of the First Time Buyer Magazine

Buyers may be aware that in the near future, the rules regarding Stamp Duty Land Tax (SDLT) will be changing. There has been bits and pieces in the media regarding this, although it’s not been overly publicised, therefore new Buyers may not know the impact these changes may have on their transaction if it does not complete prior to 1^st April 2025.

Just for clarity, SDLT is the tax that the Government imposes on a Buyer when purchasing property or land. The amount payable depends on the value of the property and land.

So lets outline these changes. If your purchase completes from 1^st April 2025 and you are not a First Time Buyer, the following rates apply:

Purchase Price                                                                                       % Rate of Tax

Up to £125,000                                                                                                       Zero

The next £125,000 (the portion from £125,001 to £250,000)                      2%

The next £675,000 (the portion from £250,001 to £925,000)                    5%

The next £575,000 (the portion from £925,001 to £1.5 million)                 10%

For First Time Buyers, the changes are as follows:

Purchase Price                                                                                       % Rate of Tax

Up to £300,000                                                                                                     0%

£300,001 to £425,000                                                                                          5%

£425,001 to £500,000                                                                                          5%

£500,001 to £625,000                                                                                          5%

Currently, the rate of 2% starts when the property value is over £250,000.00 for non-First Time Buyers. For First Time Buyers, nothing is payable if the property value is under £425,000.00. Therefore, these changes will have quite the impact on Buyers all round.

The market is already busier because of these impending amendments as Buyers will want to ensure that their transactions complete by 31^st March 2025 to avoid any additional financial implications. However, Buyers instructing now, soon, or recently instructed even, should bear in mind that there will be additional liability if completion occurs after this date and should ensure they have suitable funds in place in light of this.

Many First Time Buyers purchasing shared ownership properties, may consider that the above changes will not impact them too badly and for a majority that will be the case, however the impact is not always financial. If a First Time Buyer is in a chain (which is where the Seller may be tying in a purchase, as might their seller) then these changes may have impacts further up the chain. Having been a survivor of the previous 2020-2021 SDLT holiday, we did see chains collapse due to Buyers not being able to proceed financially when the holiday (finally) ended.

In addition, the decision whether to pay SDLT on the full market value or based on the value of the share being purchased (an option that is only available when a shared ownership lease is initially granted - on resale shared ownership properties SDLT can only be paid based on the share being purchased) may now sway towards paying on just the share, resulting in further liability if a leaseholder decides to staircase over 80% in the future. Therefore, although there may not be an immediate impact on First Time Buyers buying new build shared ownership properties, there will be a long-term impact when it comes to SDLT and Staircasing. First Time Buyers will need to bear this in mind and budget accordingly.

When looking to instruct a conveyancer, ask if they have capacity to take on your transaction and set out your expectations. No conveyancer will be able to guarantee that your transaction will be able to complete prior to 1^st April 2025 due to external factors outside their control, however instructing a conveyancer experienced in shared ownership will assist in ensuring the transaction is dealt with as efficiently as possible.

In Conclusion -

Owen Paulo specialises in Resales and Staircasing. Please email enquiries@owenpaulo.co.uk or call us on 0808 196 7020 to obtain a quote, or advice. You can also follow us on TikTok on @owenpaulolegal where you can find further information and advice on the conveyancing process and answers to frequently asked Questions.