What Do Stamp Duty Changes Mean For You?

Rebecca Reeves announced that there will be a change in the higher rate Stamp Duty Land Tax payable on the purchase of additional properties, increasing the higher rate from 3% to 5%.

This means that an additional 5% stamp duty is payable when a second property or a buy-to-let property is being purchased that does not replace the main residence of the purchaser, resulting in the purchaser having an interest in one or more properties at the time of completion.

This property can be anywhere in the world or even a property held in trust for them. It also means that where purchaser’s complete on their purchase before the sale of their property they will need to pay the higher rate, although a refund of the higher rate SDLT can be claimed back if they sell or give away their previous home within 3 years of buying the new property.

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.

Currently first-time buyers pay no stamp duty when buying a home worth £425,000. This threshold will drop to £300,000, meaning they will go from paying nothing to paying £6,250 on stamp duty.

In the article below we’ll explain these changes in more detail, how this could affect your move, and work out how much it could cost you, by using our stamp duty calculator 2025.

What Is Stamp Duty?

Stamp duty, is a government tax which is paid by the buyer of a property, as a lump sum upon completion. It is paid by buyers who are purchasing a property or land over a certain price bracket.

The amount of SDLT liability depends on several factors, including (but not limited to) whether a buyer is:

Purchasing additional property
A UK resident
Purchasing a property as an individual or company
A first-time buyer
Replacing a main residence

Why Is Stamp Duty Changing?

In September 2022, the then Conservative Government announced a temporary change in 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 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 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.

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).

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.

To take advantage of the current stamp duty rates, and save yourself on average £6,250 as a first-time buyer and £2,500 as a home mover, 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. This means the latest you can start the conveyancing process will be before Christmas 2024.

Read our full article here on LinkedIn.

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