UK House Prices: Labour Plans to End Higher Stamp Duty Tax Break in 2025
The UK Labour Party has announced plans to let higher stamp duty thresholds expire, which could affect homebuyers looking to benefit from tax breaks. The temporary stamp duty relief, introduced during the pandemic to boost the housing market, will end as planned. This move could slow down the market, especially for first-time buyers and those purchasing higher-value properties. The return of standard stamp duty rates might increase the costs of buying homes across the UK.
Tim Bannister, Rightmove’s director of property science, said: “The rumours that “nil rate” and first-time buyer stamp duty thresholds will indeed be reverting to previous levels as of March 2025, rather than be held at their current rates, will no doubt be seen as an unwelcome additional cost by many buyers looking to make their move in 2025 – and potentially to those currently in the process. We’re likely to see a rush to complete property transactions before the stamp duty changes occur as buyers look to avoid the additional costs, meaning a busier Christmas and New Year for the housing market.
Under these changes, homebuyers will face two major impacts:
- Standard buyers: The tax-free threshold will drop from £250,000 to £125,000. At the UK average house price of £300,000, buyers will pay an extra £2,500 in stamp duty.
- First-time buyers: From April 2025, their tax-free threshold will decrease from £425,000 to £300,000. This reduction will particularly affect first-time buyers purchasing homes between £425,000 and £625,000, who currently receive stamp duty relief.
