Stamp duty on the average home could rise to £4,669 from March as Labor sets to rule out threshold freeze

Someone buying a mid-priced home in England and Northern Ireland could see their stamp duty bill more than double from March next year, as Labor rules out any changes to the tax in the Budget.

The amount owed on a typical house could range from £2,169 to £4,669, based on the average price of £293,299 in the latest Halifax House Price Index.

Currently, people moving home pay stamp duty if their home costs more than £250,000, but in March 2025 this will drop back to £125,000, the level it was at before they were made temporary changes to the 2022 mini-budget.

Labor had been urged to consider freezing the tax at its current levels, but the Chancellor is understood to have decided against doing so.

Since the end of 2022, a first-time buyer purchasing a property worth up to £425,000 has not paid any stamp duty. If your house is more expensive, you only pay tax on the part above £425,000.

However, this limit, which has been at its current level since 2022, will fall back to the old threshold of £300,000 from 31 March 2025.

This means the same £425,000 purchase will be subject to a tax bill of £6,205 when stamp duty rates return to previous levels.

Tim Bannister, property expert at Rightmove, said: “This will no doubt be seen as an unwanted additional cost by many buyers looking to move in 2025, and potentially by those currently in the process.”

“As the threshold for nil rate – the rate at which stamp duty is not charged to removal companies – will fall from £250,000 to £125,000, anyone purchasing a property above this amount could face paying up to £2,500 more in stamp duty.

‘Meanwhile, the threshold at which first-time buyers do not pay stamp duty is likely to fall from £425,000 to £300,000.

“If a first-time buyer buys a property at the average UK sales price of £370,759, they will pay £3,538 in stamp duty from March 2025, compared to nothing now.”

The average sales price is significantly higher than the average sales price.

Rightmove says that with the current thresholds, 58 per cent of properties are exempt from stamp duty for first-time buyers.

If the threshold is lowered, only 37 per cent of homes would remain free of stamp duty, a reduction from 21 per cent.

This will especially affect buyers in regions with higher property prices, such as London and the South East.

Bannister expects many people will try to advance their purchases to avoid the additional cost.

He adds: ‘We are likely to see a rush to complete property transactions before the stamp duty changes come into effect as buyers look to avoid the extra costs, meaning a busier Christmas and New Year. for the real estate market.

‘The average time it takes to complete a sale from the moment an offer is accepted is currently 152 days.

“Coincidentally, this is the same number of days between the 30 October 2024 budget and the proposed stamp duty deadline of 31 March 2025.

“This means that, on average, buyers who accept a purchase after quote may not complete it on time unless everyone involved in the transaction works together to expedite the process.”