Stamp Duty and the 2024 Budget

Labour’s first budget for 14 years was awaited with an anxious anticipation. In the world of conveyancing all eyes were on Stamp Duty and whether there would be any changes to the current rates.

The headline news was the 2% increase in “second home” stamp duty from 3% to 5% over the standard rate. With the Renters Bill about to pass into law there was immediate concern that Landlords would step back from buying, meaning less rental properties available and a possible dip in the market. It’s too early to tell if this will actually materialise but simply antidotally it does not appear to have made much of an impact. 

Perhaps the biggest surprise was the speed at which the stamp duty change was implemented – announced on the 30th and taking effect on the 31st. 

To mitigate this sudden change, any properties which had already exchanged would not attract the higher rate – which was a relief to those of us with clients who otherwise would have had a sudden and expected bill. 

But this still leaves many buyers of “second” properties who have spent out on searches, surveys and legal fees having to decide if they want to proceed, (and find thousands more to pay additional stamp duty) or if they should walk away from the sums they have already spent and withdrawn from their purchase.

Remembering the manic times of the last stamp duty cliff edge change many conveyancers were relieved that there would not be any delay in the implementation of the duty which would have resulted in a huge rush to try and complete any second home purchases before the cut off.

However, that is not to say that this “cliff edge” of stamp duty change has been completely avoided. A bigger and far more wide reaching stamp duty change is looming. 

The Conservative government’s stamp duty holiday is due to end on 31st March 2025 and there was nothing in Rachel Reeves budget to extend this.

Therefore the nil rate threshold for paying stamp duty which is currently £250,000 will return to the previous level of £125,000. The nil rate threshold for first time buyers which is currently £425,000 will return to the previous level of £300,000 and the maximum purchase price for which First-Time Buyers Relief which can be claimed will return to the previous level of £500,000 from its current level of £625,000.

This will mean a mad rush for completions to take place before the cut off of 31 March as each chain fights to avoid thousands in stamp duty.