Stamp duty changes planned in budget
Next month’s autumn budget has confirmed changes to the stamp duty land tax thresholds. From March 2025, the threshold for stamp duty will decrease from £250,000 to £125,000. This increases the tax on average homes from £2,768 to £5,268.
The change to stamp duty will affect general homebuyers as well as first-time buyers with the latter currently paying no stamp duty on properties up to £425,000. This threshold was reduced to £300,000 in April 2025. It would be the first time that first-time buyers now have to pay £8,750 on a £425,000 property.
David Hannah, Group Chairman of Cornerstone Tax, the UK’s leading stamp duty advisory has argued in response to this that the Chancellor should reverse these plans, urging the government to avoid a sudden increase in taxes on homebuyers. He has argued that reducing the stamp duty burden will have long-term economic benefits including giving a boost to the country’s housing market through the support of first-time buyers.
Cornerstone Tax’s research has found that 44% say that they cannot live in a desired location because of the rise in house prices in the area. Supporting first time buyers, it said, is a must for the new government. Despite stamp duty generating around £13 billion annually, a temporary cut in 2022 caused receipts to surge £17.5 billion. David Hannah has called on keeping the existing thresholds to further stimulate the property market and the national economy as a result.
Homes valued at £250,000 or less are currently exempt. Those between £250,000 and £925,000 meanwhile face a 5% levy. The average home in the UK is priced at £285,201 making it clear that thresholds could be due for a review. Hannah has argued that adjusting these bands would both boost sales for first-time buyers and benefit pensioners looking to climb further up the property ladder. Increasing demand for mid-to-high-end properties would create a ripple effect that would enable homeowners to sell lower-end properties and help the stagnant housing market.
