Over 70,000 homemovers set to miss stamp duty deadline

If you’ve moved home recently, or you’re going through the home-buying process right now, chances are it’s taking much longer to get your keys than you might have expected. The home-buying process in England is taking longer than ever, with an average completion time of 163 days – over five months from the time a sale is agreed.

But this lengthy process takes on a whole new significance when it could result in higher costs for homemovers, too. The current stamp duty thresholds are due to fall back after 31 March 2025, which could mean home-movers pay on average £2,500 more by completing in April instead of March.

Our study reveals that over 25,000 first-time buyers in England are on track to miss the crucial 31 March stamp duty deadline, which accounts for £34 million in additional tax payments for those completing on their first home purchases in April rather than March. And in total, almost 74,000 home-movers could be impacted by the changing thresholds, with an estimated £142 million in additional tax at stake in total.

How much extra might home-movers pay?

From April 1st, home-movers will face significantly higher stamp duty costs:

• On average, homemovers in England will pay an extra £2,500
• First-time buyers purchasing homes between £500,001 and £625,000 will see an increase of £11,250 in stamp duty
• First-time buyers purchasing homes at £425,000 will now need to pay £6,250, whereas they would have paid nothing before the deadline

These numbers highlight just how much first-time buyers stand to be affected, particularly on first-time buyers, who have already spent years saving to get onto the property ladder. The threshold at which first-time buyers start paying stamp duty is set to fall back to £300,000 from the end of March. Back in 2017, when the £300,000 first-time buyer stamp duty relief was introduced, this figure fell more in line with the average house price, which was £302,630. Whereas today, the average house price is £367,994.

Which region is set to be the most affected?

Given the higher property prices in this region, the South East stands to be the region most affected by the changes, with around 14,000 movers in the region set to be impacted by the missed deadline.

We’re calling for a short extension to the deadline to support the thousands of home-movers who stand to face these extra costs due to measures completely outside of their control. We’ve highlighted that this issue is particularly pressing for first-time buyers purchasing homes between £500,001 and £625,000, who will see their stamp duty costs increase by as much as £11,250 if they complete in April instead of March.

Our property expert, Colleen Babcock, says: “We expect a rush to complete close to March 31st as first-time buyers and home-movers try to avoid paying extra in tax. Our numbers show how there is a relatively small, but disproportionately impacted group of first-time buyers who will be caught out by the changing thresholds, highlighting some disparities in the way the current system works. With 74,000 people only just set to miss the deadline, in part because of the extremely lengthy completion times in England, we think it would make sense to grant a short extension to the deadline and help these movers, rather than have them face higher charges when they complete later in April.”

Extending the deadline by even a short period would ease financial strain on tens of thousands of home-movers, allowing them to complete on their purchases without incurring unexpected extra moving costs.

The header image for this article was provided courtesy of Mark Buchanan Property Group, Powered by eXp UK, Workington

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