Stamp duty rise comes into force for home buyers: Calculate the tax YOU will now pay

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Home buyers will pay more stamp duty from today, as tax thresholds temporarily established in 2022 have been lowered.

From 1 April, purchasers who aren't first-time buyers will start paying stamp duty if the property costs more than £125,000, down from a threshold of £250,000.

On a £250,000 property purchase this will mean paying an extra £2,500 in upfront taxes.

First-time buyers will bear the brunt of the changes. Until yesterday they paid stamp duty if a home cost more than £425,000, but this has now dropped to £300,000.

Instead of paying no stamp duty on a purchase worth £425,000, they will pay £6,205.

First-time buyers in London where the average property value is £564,000 will see the greatest jump in costs.

Someone buying the average home in the capital will see their stamp duty bill rise from £6,950 to £18,200.  

Coupled with higher mortgage rates this will add an extra financial burden for first-time buyers, who may find they have to lower their budgets to accommodate the tax. 

How it will affect different buyers 

Home mover purchasing a £250,000 home

Stamp duty pre-1 April: £0

Stamp duty post-1 April: £2,500

Home mover purchasing a £450,000 home

Stamp duty pre-1 April: £10,000

Stamp duty post-1 April: £12,500

Adventum UK Manchester is advertising a two bedroom two bath appartment for £450,000 on the 11th floor in the newly completed development The Blade Tower in Deansgate Manchester

Home mover purchasing a £800,000 home

Stamp duty pre-1 April: £27,500

Stamp duty post-1 April: £30,000

Holden Copley is advertising this five-bedroom detached house in Nottinghamshire for a guide price of £800,000-£850,000

First-time buyer purchasing a £200,000 home

Stamp duty pre-1 April: £0

Stamp duty post-1 April: £0

RWinvest is advertising two bedroom apartments for £200k in this eco-development within the Knowledge Quarter in Liverpool - could be an ideal first home or buy-to-let investment

First-time buyer purchasing a £425,000 home

Stamp duty pre-1 April: £0

Stamp duty post-1 April: £6,250

Samuel Wood estate agents is offering for sale this four bed two bedroom home on Victoria Street, Shrewsbury for £450,000

First-time buyer purchasing a £600,000 home

Stamp duty pre-1 April: £8,750

Stamp duty post-1 April: £20,000

Winkworth is advertising this two double bedroom, ground floor, period conversion flat with a private garden in Streatham Hill for £600,000

Will stamp duty rise affect house prices?

Activity has accelerated in the housing market as buyers aimed to get sales completed ahead of the tax hike. 

Looking ahead, some experts think the stamp duty stampede will give way to a lull.

This happened noticeably in July 2021 after the previous stamp duty holiday, which was in place during the pandemic, began to be phased out. 

This resulted in average house prices falling by 4.7 per cent in one month from £242,777 to £231,386, according to Land Registry data, a dive of more than £10,000.

The stamp duty holiday was fully phased out on 30 September 2021, which resulted in another monthly fall of 2.5 per cent in October.

'It was disappointing not to see an extension or an alternative to support first time buyers,' said Mark Harris, chief executive of mortgage broker SPF Private Clients.

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'I suspect we will see part of the additional cost absorbed into house prices and form part of the negotiation process between vendors and buyers.

'It has certainly been very busy over the last couple of weeks ahead of the window closing.'

Tom Bill, head of UK residential research at Knight Frank is expecting to see prices fall over the next couple of months.

'We expect a dip in activity for a couple of months as the stamp duty clock effectively resets,' said Bill.

'Some buyers are put off by a stamp duty cliff edge and will start looking again once the playing field has been re-levelled. 

'When they do, they will find that supply is relatively robust and we anticipate downwards price pressure due to this imbalance but activity should recover by the end of the second quarter.'