Moving In 2025? How The Changes To Stamp Duty Effect YOU!

The upcoming changes to Stamp Duty Land Tax (SDLT) in April 2025 are poised to significantly impact homeowners and prospective buyers in Folkestone...

Understanding these changes is crucial for those navigating the local property market.

Overview of the 2025 Stamp Duty Changes

Effective from 1st April 2025, the UK government will revert SDLT thresholds to pre-2022 levels:

1. Standard Buyers: The nil-rate band will decrease from £250,000 to £125,000. This means that any property purchase above £125,000 will attract SDLT.

2. First-Time Buyers: The exemption threshold will reduce from £425,000 to £300,000, with relief applicable only up to £500,000. Purchases above this limit will not qualify for first-time buyer relief.

   
   

Current Property Market in Folkestone

As of December 2024, the average house price in Folkestone and Hythe stands at £313,000, reflecting a 6.3% increase from December 2023. This figure surpasses the new standard SDLT threshold, indicating that many transactions will incur higher tax liabilities post-April 2025.

Impact on Homeowners and Buyers in Folkestone

1. Increased Tax Liabilities: With the lowered thresholds, a significant number of property transactions in Folkestone will attract higher SDLT. For instance, purchasing a property at the average price of £313,000 post-April 2025 would result in an SDLT payment of £3,900 for standard buyers.

2. First-Time Buyers: The reduction in relief thresholds means that first-time buyers purchasing properties between £300,000 and £500,000 will now face SDLT charges. Given that the average price for first-time buyers in the area is £256,000, many may still benefit from relief; however, those aiming for higher-priced properties will need to budget for additional costs.

3. Market Dynamics: The impending changes may lead to a surge in property transactions as buyers and sellers rush to complete deals before the April deadline. This increased demand could temporarily inflate property prices, further impacting affordability.

   
   

Strategic Considerations for Stakeholders

• Accelerate Transactions: Buyers and sellers should consider expediting property deals to finalise before the 1st April 2025 deadline, thereby benefiting from the current SDLT thresholds.

• Financial Planning: Prospective buyers must reassess their budgets to account for the impending SDLT changes, ensuring they have adequate funds to cover the increased tax liabilities.

• Seek Professional Advice: Engaging with local estate agents and financial advisors can provide tailored insights and strategies to navigate the evolving property landscape in Folkestone effectively.

  
  

In summary, the forthcoming SDLT revisions are set to reshape the property market in Folkestone, Kent. Stakeholders are encouraged to stay informed and proactive to mitigate potential financial impacts. Should you have any questions regarding the changes to SDLT or want to explore options regarding your property assets, please give Lee or Matthew a call on: 01303 475085.

Sources: Together Money, Office For National Statistics, The Times.