Stamp Duty is changing – how does this impact your move?
Stamp Duty Land Tax (SDLT) rates are changing from 1 April 2025, which could add thousands to your home move.
When the temporary reliefs were put in place in September 2022, these were always due to end on 1 April 2025. The reliefs were designed to support the housing market and the jobs and businesses that rely on it post-lockdown, alongside supporting those who were hoping to get on the housing ladder.
Whilst this change will impact everyone planning to move, it’s first-time buyers who will be the most affected.
How is stamp duty changing?
From 1st April 2025, there will be several changes coming into effect:
- The nil rate threshold (up to which no SDLT is paid) 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 the previous level of £300,000
- The maximum purchase price for which first-time buyer relief can be claimed is currently £625,000 and will return the previous level of £500,000
The table below shows the current SDLT rates for main residences in England
*The figures are based on a standard residential purchase of a freehold property, which is to be a main residence for a UK resident.
| Property value | Rate for main residence |
|---|---|
| Up to £250,000 | 0% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1.5m | 10% |
| Over £1.5m | 12% |
From 1st April 2025, the SDLT rates will be:
| 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 £1.5m | 10% |
| Over £1.5m | 12% |
How will these changes affect First Time Buyers?
By reducing the nil rate threshold by £125,000 and reducing the maximum property 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.
Current first-time buyer SDLTrates:
| Proportion of property value | Rate for first-time buyers |
|---|---|
| Up to £425,000 | 0% |
| £425,001 – £625,000 | 5% |
e.g. a first-time buyer purchasing at £525,000 in England before 31st March, will start paying SDLT at £425,000 – total £5,000 SDLT payment.
First time-buyer SDLT rates from 1 April 2025
| Proportion of property value | Rate for first-time buyers |
|---|---|
| Up to £300,000 | 0% |
| £300,001 to £500,000 | 5% |
Using the same example as above, afirst-time buyer purchasing at £525,000 in England, will lose the first time buyer’s relief and pay SDLT of £16,250.
To pay only £5,000 SDLT a first time buyer will then have to purchase a property worth no more than £400,000.
How will the stamp duty changes affect second home purchases?
As of 1 April 2025, there will be an extra band added into the SDLT thresholds for additional property purchases.
Current SDLT 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 £1.5m | 15% |
| Over £1.5m | 17% |
From 1 April 2025, the SDLT 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 £1.5m | 15% |
| Over 1.5m | 17% |
There is a lot of information to digest, so please do get in touch with our Conveyancing Department for any queries. We do not offer specific Stamp Duty advice and are not tax advisors but we can talk you through these changes.