Martin Lewis says 'act now' to first-time buyers as they could face extra £11,000 charge

Martin Lewis saysneed to "act now" to avoid huge hikes in Stamp Duty Tax charges.

The Money Show returned to screens last night for the second time this week for its Special, which saw the Money Saving Expert (MSE) website founder analyse what was announced. One of the big changes announced by Chancellor this week was the change to Stamp Duty. This is a tax applied to home purchases above certain thresholds.

Speaking on a Budget special Martin said: “If you’re looking to buy now, you want to get it done before next April as it is going to get a lot more expensive.”

On the show, Martin said the biggest changes were to Stamp Duty on second homes, where the rate would increase from the current rate of 3% to 5% from October 31. However, Martin warned that there were further changes that would impact first-time buyers and were hidden in Budget documents.

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He explained: "In England and Northern Ireland, the Stamp Duty thresholds are to be cut on April 1, 2025 So why wasn't it in the speech? Well, this is because the last government increased the threshold at which you pay Stamp Duty, and it was planned to come down if the Chancellor didn't decide to continue the old thresholds. So in reality, Stamp Duty thresholds are coming down."

Currently, you pay no Stamp Duty on properties up to £250,000 - up from £125,000 before - and you pay 5% when it is over. This threshold will be reduced back down to £125,000 from next April.

For first-time buyers, Martin says there are two changes which are important. First-time buyers are currently exempt from paying stamp duty on properties priced up to £425,000. If a property is more expensive they only pay tax at 5% on the portion above £425,000 and up to £625,000.

Martin said that like normal Stamp Duty, the lower limit for the first-time buyer Stamp Duty was temporarily increased in 2022, but the chancellor has now announced it will revert to £300,000 in April next year. The higher limit will also be dropping to £500,000 - so if you are buying a house above this level you will receive no first-time buyer relief.

He explained: "Now, what that means in practice is for someone buying a property worth £425,000, you're going to be paying an extra £6,250 in Stamp Duty from next April than you are right now. For someone buying a property over £625,00, you're going to be paying an extra £11,250 pounds more in Stamp Duty."

He again urged first-time buyers looking into getting on to the property ladder to consider trying to get their deal done befre next April, as it is set to get more expensive. He added: "I know it's not what you want to hear, but you need to understand what's going to happen."

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