The percentage of property sales with stamp duty will jump from just 10% today in Northern Ireland to 59% from April, new analysis has shown.
The analysis, from property website Zoopla, estimates the cost of buying a home will increase for the majority of buyers when the stamp duty land tax (SDLT) relief - introduced in the 2022 mini budget - comes to an end and reverts to previous rates.
The impact and extra cost is set to vary across the UK between existing homeowners and first-time buyers, with different rates applicable, with around one-in-twenty first time buyers here set to be hit with the tax.
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The property site's analysis puts the estimated increase in stamp duty revenue for the government at £1.1 billion per year.
The Zoopla analysis states: "From the 1st April of 2025, four in every five (83 per cent) homeowners will pay stamp duty on buying a main residence, up from 49 per cent today, as the two per cent rate between £125,000 and £250,000 returns. Less than a fifth of homeowners (17 per cent) will pay no stamp duty on purchases below £125,000.
"This means that the 49 per cent of homeowner purchases over £250,000 will pay an extra £2,500 in stamp duty from April. The 33 per cent of buyers purchasing between £125,000 and £250,000 will pay two per cent on the purchase price up to a maximum of £2,500. Zoopla estimates this will generate an additional £900m in stamp duty."
The proportion of first-time buyers paying stamp duty is set to double, Zoopla say.
"First-time buyers will pay stamp duty on purchases over £300,000 from April, meaning three in five (58 per cent) will avoid this extra cost of buying," the property site's analysis states.
"This helps those buying in areas with lower house prices. The number of first-time buyers liable to pay stamp duty will be the lowest in the North East (two per cent), Yorkshire and the Humber (three per cent), Northern Ireland (five per cent) and the North West (five per cent).
"However, the proportion of first-time buyers liable to pay stamp duty will double to 42 per cent from April, hitting London and South East buyers in the £300,000 and £625,000 range the hardest, with costs of up to £15,000 per purchase. Buying at £350,000 will cost £2,500 per purchase, up from £0 today. Buying a £500,000 home will cost £10,000 in stamp duty, up from £3,750 today and buying at £550,000 will jump from £6,250 to £15,000."
Zoopla estimates this will generate an additional £200m in stamp duty.
Richard Donnell, Executive Director at Zoopla comments: “Stamp duty has become a big source of tax revenue, approaching £10bn a year for the government. The reduction in tax reliefs from April will see more home buyers paying stamp duty.
“Existing homeowners will pay up to £2,500 more for each purchase across a large number of sales. The average seller has made £60,000 in capital gains so there is flexibility to absorb this cost but buyers will expect to factor this extra cost into what they offer.
“It’s positive that most first-time buyers will still pay no stamp duty from April, but these changes hit those buying over £300,000 in southern England the most where buying costs are already high. This will reduce buying power and market activity at a local level."
He added: "Stamp duty is a big tax on home movers in southern England where affordability problems are already a major challenge. The case for reforming stamp duty remains but the question is where to replace the multi-billion in annual tax revenues.”
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