Jennifer said the budget, which took place on October 30 and was the Labour government’s first since taking office, included a range of implications for the residential conveyancing market in England and it was important for those considering buying residential properties to understand these and respond accordingly.
In September 2022, the previous government temporarily raised the minimum threshold for Stamp Duty Land Tax (SDLT), which is paid to HM Revenue and Customs when someone buys a property, in England to £250,000 until March 31, 2025.
This meant all properties purchased for less than this price do not currently pay SDLT unless the purchaser already owns other residential property.
Jennifer said there had been hopes among the residential property industry that these raised thresholds would be extended in the budget, but the absence of any announcement by chancellor Rachel Reeves in her statement confirmed the return to the original £125,000 threshold.
She said: “That means anyone buying a property over £125,000 will have to pay two per cent of its price above this value in tax from April 1, 2025. For example, if you buy a house for £200,000 from 1 April 2025 onwards, you will pay an additional £1,500 in tax, which is two per cent of £75,000.
“In addition to this, home buyers will pay five per cent of a property’s purchase price above £250,000.”
Jennifer also said the purchase of residential properties generally takes around three to four months to complete for buyers in a chain, meaning those currently considering buying a property had a short window to ensure they could realistically complete the purchase before the threshold increase, allowing them to avoid this tax.
“In addition, there are specific implications for those buying their first property,” Jennifer added.
“The nil-rate threshold for First Time Buyers’ Relief was also temporarily increased from £300,000 to £425,000 by the Conservative government and this will now revert to its original £300,000 on April 1. That means buyers will pay SDLT on the price of their first home above £300,000 from April.
“We think between now and Christmas is going to be a very busy time for the residential property market.
“WHN has invested significantly in our conveyancing team across our offices over the past two years. Whether you are a first-time buyer, looking to buy your next home or if you are a residential property investor, our experts are ready to support you throughout this crucial period.”
WHN employs over 100 staff across offices in Accrington, Bacup, Blackburn, Bury, Clitheroe, Great Harwood, Haslington, Rawtenstall and Salford, including a residential conveyancing team of 18.
In addition to the absence of an extension to the temporarily raised SDLT thresholds in the budget, Jennifer highlighted the announced increase of the SDLT surcharge for those buying second properties and its implications.
She said: “If you own more than one property, the three per cent surcharge for properties up to £250,000 has been raised to five per cent and this came into effect on October 31 – the day after the budget.
“That will increase the cost for those buying second homes, including holiday homes as well as buy-to-let investors.”