First-Time Buyers: How the End of Stamp Duty Incentive May Affect You

As a first-time buyer, the idea of getting onto the property ladder can be exciting, but also a little overwhelming – especially when it comes to the financial side of things. One of the most significant costs you’ll face is Stamp Duty, which is a tax charged on properties over a certain value. In recent years, the government has introduced Stamp Duty relief for first-time buyers which has made homeownership more affordable. However, there’s growing uncertainty about whether the relief will continue.  

At the moment, the government has made no plans to renew incentive, meaning first-time buyers may soon face higher costs. In this blog, we’ll explore what this means for first-time buyers and how you can prepare for the changes in 2025. 

What is Stamp Duty and How Does It Affect First-Time Buyers? 

Stamp Duty is a tax levied by the government on the purchase of property. The amount you pay will depend on the value of the home you’re buying and the applicable Stamp Duty rates. Currently, first-time buyers are subject to lower Stamp Duty rates, which makes homeownership more accessible. 

For first-time buyers, the threshold for paying Stamp Duty in England and Northern Ireland has been raised, thanks to government relief. This means that if the property price is below a certain value, first-time buyers won’t have to pay Stamp Duty at all.  

However, this relief isn’t indefinite. It's important to stay informed about the upcoming changes with experienced independent mortgage brokers, especially for those planning to buy a home in the next few years. 

Current Stamp Duty Relief for First-Time Buyers Until April 2025  

Currently, first-time buyers in England and Northern Ireland enjoy a Stamp Duty relief scheme that significantly reduces the amount they pay. If the property is worth up to £425,000, no stamp duty is charged for first-time buyers. This relief makes it easier to afford the upfront costs of buying a home, which is particularly helpful for those trying to save for a deposit.  

For properties between £425,001 and £625,000, first-time buyers pay a reduced rate, with the first £425,000 exempt from tax. Therefore, for properties worth under £425,000, no stamp duty is paid.

This scheme runs until 31st March 2025 , and after this, it’s uncertain whether these relief measures will continue. So, if you want to buy in the next few years, now is the time to get informed and plan accordingly!  

What Will Happen After April 2025?  

After April 2025, first-time buyers may be required to pay standard Stamp Duty rates if the value of the property exceeds certain thresholds. There are no plans to extend the relief at the moment, so unless the government announces a new scheme, first-time buyers may face Stamp Duty for properties above £300,000.

How Will This Affect First-Time Buyers in Different Regions? 

The changes to Stamp Duty will have different impacts depending on where you live in the UK, due to varying property values in different regions. For instance: 

London and the South East: 

With the average house price in London well over £500,000, many first-time buyers will likely face higher Stamp Duty charges once the relief ends on 31st March 2025. In London, first-time buyers could pay 5% Stamp Duty on homes valued above £300,000.  

Other regions: 

In places like the South West, East of England, and certain cities outside of London, first-time buyers may also face higher Stamp Duty bills for properties priced between £300,000 and £500,000. 

How RM Mortgage Solutions Can Help 

As a first-time buyer, it's crucial to stay informed about Stamp Duty changes, especially with the current relief scheme set to end on 31st March 2025. By understanding how the changes will impact you and planning ahead, you can ensure you’re prepared for a smooth home-buying experience. 

If you’re unsure about the impact of Stamp Duty on your property purchase, RM Mortgage Solutions is here to help. With expert guidance from our mortgage advisors in Birmingham, Walsall, and across the West Midlands, we’ll help you navigate these challenges and turn your homeownership dreams into a reality.  

Get in touch with our team to start discussing your options.