Upcoming Changes to Stamp Duty ( effective 31 March 2025)
In this article we will explain the Stamp Duty Land Tax changes ( SDLT, or as it is better known Stamp duty ) and compare costs for different buyer types to help you understand how the changes might affect you.
There are significant Stamp Duty changes in 2025, that those making any property-related plans in the coming months should be aware of.
Stamp Duty Land Tax is the tax payable to HM Revenue and Customs when buying a property. The amount of Stamp duty will depend on several factors, including :
- Is the buyers a UK resident
- Are they purchasing a property as an individual or company
- Aa first-time buyer
- Replacing a their main home
- Buying for an additional property
In September 2022, the Government announced a temporary increase to the thresholds for stamp duty. These increases are due to end on 31 March 2025, meaning that any transaction which completes after will be subject to the increased rates.
The current Stamp Duty rates on a standard residential purchase of a freehold property for an individual that is UK resident and replacing a main residence are as follows:
0% up to £250,000
5% above £250,000 and up to £925,000
10% above £925,000 and up to £1,500,000
12% above £1,500,000
On 31 March 2025, there are several changes coming into effect.
- The nil rate threshold currently £250,000 will return to the previous level of £125,000.
- The nil rate threshold for first time buyers, currently £425,000 will return to £300,000.
- The maximum price for which First-Time Buyers Relief can be claimed is currently £625,000 and will return to £500,000.
So, from 31 March 2025 the rates on a standard residential purchase of a freehold property replacing a main residence will be as follows:
0% up to £125,000
2% above £125,000 and up to £250,000
5% above £250,000 and up to £925,000
10% above £925,000 and up to £1,500,000
12% above £1,500,000
Want to check how much stamp duty is payable on your purchase use our stamp duty calculator here
By completing before the Stamp Duty changes come into effect, a buyer can save upto a significant £2,500.
The rules are different for second homeowners (investors) and companies.
Second homes and investment properties
Immediately after the Autumn Budget, as of 31 October 2024, the UK government increased the Stamp Duty Land Tax (SDLT) surcharge for additional residential properties from 3% to 5% above the standard rates.
This change affects purchases of second homes, buy-to-let investments, and holiday properties.
From April 2025 there will be an additional charge of 2% for the portion between £125,000 and £250,000 which will further add cost to these types of purchases.
SDLT Rates for Additional Properties: Before and After April 2025
Property Value (£) Rate Before April 2025 Rate After April 2025
Up to £125,000 5% 5%
£125,001 to £250,000 5% 7%
£250,001 to £925,000 10% 10%
£925,001 to £1.5 million 15% 15%
Above £1.5 million 17% 17%
The Stamp Duty changes are likely to have the most significant 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 may mean that first time buyers have no other choice but to wait even longer to get on the property ladder.
For first-time buyers the rate will be as follows:
How much will first-time buyers pay?
Currently, in England first-time buyers are exempt from paying stamp duty on homes priced up to £425,000. However, starting April 1, 2025, a 5% stamp duty rate will apply to properties priced between £300,001 and £500,000.
For the latest information about Stamp Duty Land Tax rates, including a Stamp Duty calculator, please click here to access the UK Government website
For expert guidance tailored to your circumstances, contact us. Our experienced team is here to help you navigate these changes and make informed decisions.
Want to check how much your home is worth? You can get an Instant Valuation here.
If you would like to discuss selling your home, please get in touch with us This email address is being protected from spambots. You need JavaScript enabled to view it. or call any of our busy, helpful teams/offices:
Four Oaks 0121 323 3088
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Thank you for reading and your interest in Acres and our property for sale.
Nigel & Jayne Deekes – Acres Partners
