Stamp Duty Land Tax (SDLT or Stamp Duty) rates are changing from 1st April 2025, when the temporary increases to the thresholds that were put in place in September 2022, are due to come to an end. Whilst this change will impact everyone planning to move, it's first-time buyers who will be the most affected.
Stamp Duty is one of the most significant costs to consider when buying a property. Whether you're considering a move or just staying informed, this guide will bring you up to speed on the latest rules, offer useful tips, and help you make the best financial decisions when buying property.
What Is Stamp Duty and Why Is It Important?
Stamp Duty Land Tax (SDLT) is a tax that buyers pay on property or land purchases over a certain value in England and Northern Ireland. Scotland and Wales have separate taxes. This tax applies to both freehold and leasehold properties and includes cash and mortgage purchases. For most property buyers, Stamp Duty is an unavoidable cost, so knowing the rates and potential exemptions can save you money and ensure you're financially prepared.
The amount of SDLT liability depends on several factors, including (but not limited to) whether a buyer is:
- A UK resident
- Purchasing a property as an individual or company
- A first-time buyer
- Replacing a main residence
- Purchasing additional property
Why is stamp duty changing?
In September 2022, the then Conservative Government announced a temporary change to stamp duty, lowering the upfront costs of moving home. The aim of this was to support the housing market, the jobs and businesses that rely on it, and those who were hoping to get on the housing ladder. Whilst this measure was initially announced as a permanent change, at the Autumn Statement 2022, the government announced that the increase in the residential nil-rate threshold will end on 31 March 2025.
How is stamp duty changing?
From 1st April 2025, there will be several changes coming into effect:
- The nil rate threshold which is currently £250,000 will return to the previous level of £125,000.
- The nil rate threshold for first-time buyers which is currently £425,000 will return to the previous level of £300,000.
- The maximum purchase price for which First-Time Buyers Relief (a reduced stamp duty rate) can be claimed is currently £625,000 and will return to the previous level of £500,000.
The below table shows the current stamp duty rates for main residences in England:
|
Proportion of property value |
Rate for main residence |
|
Up to £250,000 |
0% |
|
£250,001 to £925,000 |
5% |
|
£925,001 to £1.5 million |
10% |
|
Over £1.5 million |
12% |
*The figures are based on a standard residential purchase of a freehold property, which is to be a main residence for an UK resident.
From 1st April 2025, the stamp duty rates will be:
|
Proportion of property value |
Rate for main residence |
|
Up to £125,000 |
0% |
|
£125,001 to £250,000 |
2% |
|
£250,001 to £925,000 |
5% |
|
£925,001 to £1.5 million |
10% |
|
Over £1.5 million |
12% |
To stay up to date with any future changes to the UK stamp duty charges visit the UK government website.
How can I beat the stamp duty changes?
To take advantage of the current stamp duty rates you’ll need to have completed on your property purchase by 1st April 2025. Whilst this date might seem quite far away, the average time to complete a house purchase in the UK is between 12 and 16 weeks and can take longer in certain circumstances.
How will the stamp duty changes affect first-time buyers?
These stamp duty changes are likely to have the most impact on first-time buyers. By reducing the nil rate threshold by £125,000 and reducing the maximum purchase price for which first-time buyers’ relief can be claimed by the same amount, it could make it even harder for some first-time buyers to get onto the property ladder.
From 1st April 2025, first-time buyers won’t pay stamp duty on properties up to only £300,000, and they’ll only get first-time buyers’ relief on properties up to £500,000 (5% on properties £300,000 to £500,000).
Whereas, currently, if you’re a first-time buyer you don’t pay any tax on properties up to £425,000, and if the cost of the property you’re buying is up to £625,000 you’re also eligible for discounted rates (5% on properties from £425,001 to £625,000).
Current first-time buyer stamp duty rates:
|
Proportion of property value |
Rate for first-time buyers |
|
Up to £425,000 |
0% |
|
£425,001 to £625,000 |
5% |
For example, if you’re a first-time buyer looking to buy a £525,000 house in England, you’ll start paying SDLT at £425,000. Your total charge would be £5,000.
First-time buyer stamp duty rates from 1st April 2025:
|
Proportion of property value |
Rate for first-time buyers |
|
Up to £300,000 |
0% |
|
£300,001 to £500,000 |
5% |
For example, if you’re a first-time buyer looking to buy a £400,000 house in England, you’ll start paying SDLT at £300,000. Your total charge would be £5,000.
How will the stamp duty changes affect second home purchases?
As of 1st April 2025, there will be an extra band added into the stamp duty thresholds for additional property purchases, reflective of the general stamp duty changes.
The below table shows the current stamp duty rates for additional properties in England:
|
Proportion of property value |
Rate for additional property |
|
Up to £250,000 |
5% |
|
£250,001 to £925,000 |
10% |
|
£925,001 to £1.5 million |
15% |
|
Over £1.5 million |
17% |
From 1st April 2025, the stamp duty rates will be:
|
Proportion of property value |
Rate for additional property |
|
Up to £125,000 |
5% |
|
£125,001 to £250,000 |
7% |
|
£250,001 to £925,000 |
10% |
|
£925,001 to £1.5 million |
15% |
|
Over £1.5 million |
17% |
What Next?
Whether you're a first-time buyer or an experienced property owner, it’s essential to stay informed about Stamp Duty changes. At Nicholls Residential, we are committed to guiding you through each step of the buying process and helping you make informed decisions.
Ready to make your next move?
Planning to buy or sell a property?
Contact Nicholls Residential today on any of the below numbers or email This email address is being protected from spambots. You need JavaScript enabled to view it. for personalised advice.
Chessington Office 0208 391 110
Epsom Town Centre Office 01372 730 111
West Ewell Office 0208 786 7879
North Cheam Office 0208 644 3480
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