Key Stamp Duty changes coming in 2025: a guide for buyers

Changes to Stamp Duty Land Tax coming in April 2025 are set to cost buyers thousands of pounds when the holiday ends.

Transactions completed after March 31, 2025, will be subjected to the new Stamp Duty rules, which could see many buyers paying more.

What is Stamp Duty?

• Stamp Duty Land Tax (SDLT) is a mandatory tax that is applied when purchasing a property or land in England and Northern Ireland
• Land Transaction Tax (LTT) is a mandatory tax applied when purchasing a property or land in Wales

Land Transaction Tax (LTT) rates and bands are currently under review with no proposed changes. 

What do first-time buyers pay?

At present, first-time buyers in England and Northern Ireland are exempt from stamp duty on homes valued up to £425,000. From April 1, 2025, homes priced between £300,001 and £500,000 will incur a 5% stamp duty charge.

For instance:

• Price of property: £350,000
• Stamp Duty now: £0
• From April 2025: £2,500

This charge will apply only to the portion of the home’s value exceeding £300,001—in this case, £50,000.

In Wales, no specific LTT relief or exemptions exist for first-time buyers, regardless of whether the purchase is for a main residence or an investment property. However, most first-time buyer homes fall near the £225,000 zero-rate threshold.

The Welsh system charges no tax on the first £225,000, followed by:

• 6% on £225,001–£400,000.
• 7.5% on £400,001–£750,000.
• 10% on £750,001–£1.5 million.
• 12% on amounts above £1.5 million.

Example:

• Purchase price: £350,000
• Stamp Duty (LTT): £7,500

The 6% rate is charged on the £125,000 between £225,000 and £350,000. Total tax: £7,500.

How will the upcoming changes influence buying or selling your home?

Currently, home movers do not pay stamp duty for properties costing £250,000 or less. But from April 1, 2025, houses valued between £125,001 and £250,000 will incur a 2% stamp duty rate.

Example Breakdown:

• Home value: £350,000
• Stamp duty now: £5,000
• From April 2025: £7,500

After April 2025, the 2% rate applies to the amount between £125,001 and £250,000 (£2,500). The 5% rate applies from £250,001 to £925,000 (£5,000). This makes the total £7,500.

For those buying in Wales, no stamp duty applies to the first £225,000. Rates then increase to 6% for £225,001 to £400,000, 7.5% for £400,001 to £750,000, 10% for £750,001 to £1.5 million, and 12% for prices above £1.5 million.

Example Calculation:

• Price: £350,000
• Stamp Duty (Wales): £7,500

The 6% rate applies to the portion between £225,001 and £400,000, which equals £7,500.

How will these changes affect those with multiple properties?

Currently, owners of more than one property pay a 5% stamp duty rate on homes priced up to £250,000. As of April 1, 2025, the 5% rate will apply only to properties priced up to £125,000.

Here’s an example:

• Price of property: £350,000
• Current stamp duty: £5,000
• After April 2025: £25,000

Under the revised structure, stamp duty will include 5% on the first £125,000 (£6,250), 7% on the next £125,000 (£8,750), and 10% on the portion above £250,000 (£10,000), making a total of £25,000.

In Wales, where Land Transaction Tax (LTT) is under review, multiple property owners currently pay 4% on the first £180,000, 7.5% on £180,001 to £250,000, 9% on £250,001 to £400,000, 11.5% on £400,001 to £750,000, 14% on £750,001 to £1,500,000, and 16% above £1,500,000.

For example:

• Property price: £350,000
• Current LTT: £21,450

This includes 4% on £180,000 (£7,200), 7.5% on £70,000 (£5,250), and 9% on £100,000 (£9,000), totaling £21,450.

To avoid increased rates, aim to finalise your transaction before March 31, 2025. Book your free valuation with our property experts to learn more about your home’s worth and discuss your options.