Stamp Duty Shake-Up: How the Budget Impacts Your Home Buying Costs
As the dust settles on the new government’s first Budget, homebuyers and property investors are digesting some significant changes coming down the pike for stamp duty taxes. While some of the increases were widely expected, the extent of the hikes transcends what many had anticipated.
For those looking to purchase their primary residence, brace yourselves – the stamp duty nil-rate threshold is being slashed from £425,000 back down to just £300,000 for first-time buyers as of March 2025. While temporary pandemic relief was certainly welcome, this return to pre-COVID levels means only 42% of properties across the UK will be exempt from stamp duty taxation.
But the real sting lands squarely on the buy-to-let and second home crowd. Effective October 30th, 2023, additional property purchases will be subject to a new 5% stamp duty surcharge on top of the normal rates. This amounts to a staggering 2% increase over the previous 3% additional property levy.
The surcharge pain doesn’t stop there for non-UK buyers either. Those based overseas who own property anywhere else globally will be hit with a whopping 7% stamp duty rate on any UK residential purchases – a 5% supplemental tax plus another 2% non-resident levy stacked on top.
At Dwello, we understand these new stamp duty rules could drastically impact the financing calculations and affordability scenarios for many aspiring buyers and investors. The thousands of pounds in additional upfront costs can’t be overlooked.
However, it’s important to keep a level head and view these changes objectively through a long-term lens. While daunting in the short run, many market analysts believe the new stamp duty framework could help cool the investment property sector and improve accessibility for first-time buyers in the long run.
Regardless of your stance, one thing is certain – the new stamp duty landscape demands revamped budgeting and scenario planning for anyone in the home buying process. Underestimating these costs by relying on outdated assumptions would be a costly mistake.
That’s why the Dwello team is here to guide you every step of the way. We’ll ensure you execute your home purchase or investment plan with complete transparency into all costs, cash flow requirements, and long-term affordability.
And for those nearing completion, keep in mind that stamp duty timeline remains unchanged – you only have 14 days from the purchase date to settle your assessed stamp duty bill. Our advisors will coordinate directly with your solicitor to nail down your liabilities and ensure you’re prepared to make that payment seamlessly.
Whether you’re a first-timer, investor, UK resident or international buyer, don’t go it alone trying to decipher these stamp duty changes. The impacts are too substantial to leave to chance. Book a Dwello consultation, and let’s chart your ideal path forward through the new fiscal realities together.
Navigating ever-evolving tax policies is all part of the service when you partner with a Dwello mortgage specialist. Get the facts, get the plan, and get prepared for a successful home purchase tailored for the long haul!
The information contained in this article does not constitute financial or mortgage advice from Dwello Mortgages. It is provided for general informational and educational purposes only. No information contained constitutes a solicitation, recommendation, endorsement or offer by Dwello.
Dwello is not making any representations or warranties, and assumes no liability, for the content provided in this article, including any third party information. Consumers should always consult their own financial advisors before making any mortgage or remortgage decisions based on this type of general market commentary and analysis.
All mortgage pricing, rate scenarios and cost comparisons used are hypothetical examples. Actual rates, fees and mortgage costs may vary based on the specific lender and the individual borrower’s personal financial circumstances.
Dwello Mortgages, a trading style of Dwello Mortgages Limited is an appointed representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority. Dwello Mortgages Limited is registered in England and Wales with company number 14432864. Registered Office: St James House, Hollinswood Road, Telford TF2 9TW
