Love it or hate it, the autumn budget delivered a number of announcements that will impact businesses and the general public in 2025 – one of which is the change to the Stamp Duty Land Tax (SDLT). If you’re a first-time buyer that’s planning on getting a first-time buyer mortgage any time soon, then here’s why it’s important to you.
On borrowed time
Okay, maybe it’s not that dramatic, but there really is only a small (and shrinking) window for first time buyers to take advantage of the current tax threshold before buying a first-time home becomes more expensive.
As it stands, there is no SDLT for first-time buyers on properties with a value up to £425,000. Thereafter, there’s a 5% liability on properties valued between £425,001 and £625,000.
So, if you’re a first-time buyer that’s purchasing a property for £500,000, you’ll pay no tax on the first £425,000, and then 5% on the remaining £75,000 portion. The result? A SDLT liability of £3,750*.
However, as of 1st April 2025, things are changing.
From that point onwards – and using the same property purchase price example of £500,000 – there will be no SDLT on properties valued up to £300,000. Thereafter, there will be a 5% tax on £300,001 to £500,000*.
This means that the tax liability on a £500,000 property jumps to £10,000. Or, to put it another way, buying a property of the same value becomes £6,250 more expensive than it is now.
The countdown begins
If you’re a first-time buyer the clock is ticking, as you now have just under five months to avoid paying extra tax, which, even on a property valued at £500,000, is substantial.
As a Guildford mortgage broker and Surrey first-time buyer mortgage specialist, our advice is to get the ball rolling … immediately.
You might be unsure about whether or not to buy in the New Year. Or maybe you’re waiting for rates to come down (which, incidentally, we don’t think will happen for some time). Regardless of your situation, if you’re a first-time buyer – or, at least you think you might be a first-time buyer in the first part of 2025 – then look to get a mortgage offer in place as soon as possible.
Not only will you benefit from securing the rate of the day (and all sounds are pointing towards rates increasing in the coming months), but you’ll also be one step further down the line as the clock ticks down to 1st April 2025.
The timeline from mortgage application to completion can take time. Many months, in some cases. So, with that in mind, why not get in touch with our team of Surrey mortgage brokers who’ll be able to start the mortgage application process for you immediately.
And, if you haven’t even started looking for a property yet, then we’d highly recommend you to … well, get moving!
To apply for a first-time buyer mortgage, contact Complete Mortgages’ team of mortgage brokers in Guildford on 01483 238280 or e-mail info@complete-mortgages.co.uk.
*Example sources: https://www.gov.uk/stamp-duty-land-tax
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