Important changes to stamp duty land tax
Significant changes to Stamp Duty Land Tax (SDLT) in England are set to take effect from 1 April 2025.
What is stamp duty?
Stamp duty land tax, otherwise known as stamp duty or SDLT, is paid when purchasing property or land in England. It is charged as a percentage of the purchase price, with different rates applying to different portions of the price.
It affects buyers in several ways, for example:
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It increases the upfront cost of buying a property, as buyers must pay the tax on top of the purchase price
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Higher rates apply to more expensive properties
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Additional rates apply for second homes and buy-to-let properties
Key changes to the stamp duty thresholds
The main changes coming into effect are on 1 April 2025 are:
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The 0% rate threshold will decrease from properties priced at £250,000 to properties priced at £125,000, meaning buyers will pay tax on properties over £125,000.
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For first-time buyers, the 0% rate threshold will reduce from £425,000 to £300,000, meaning first time buyers will pay stamp duty on properties over £300,000.
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The maximum purchase price for First-Time Buyers Relief will drop from £625,000 to £500,000. This means for properties over £500,000, first-time buyers will pay a higher Stamp Duty rate.
New stamp duty rates from April 2025
The tables below outline the current SDLT rates versus those that will apply for main residences from 1 April 2025:
|
Stamp duty rates (up to 31 March 2025) |
Stamp duty rate (1 April 2025 onwards) |
|---|---|
|
0% on the portion up to £250,000 |
0% on the portion up to £125,000 2% on the portion between £125,001 and £250,000 |
|
5% on the portion between £250,001 and £925,000 |
5% on the portion between £250,001 and £925,000 |
|
10% on the portion between £925,001 and £1,500,000 |
10% on the portion between £925,001 and £1,500,000 |
|
12% on the remaining portion above £1,500,001 |
12% on the remaining portion above £1,500,001 |
These rates apply to standard residential purchases of freehold properties intended as main residences for UK residents.
New stamp duty rates from April 2025 for first-time buyers
Currently, first-time buyers pay 0% stamp duty on properties valued up to £425,000 and 5% on properties worth £425,001 to £625,000.
From April 1st, the first-time buyers' relief will be changed, and reverting back to the following:
|
Stamp duty rates (up to 31 March 2025) |
Stamp duty rate (1 April 2025 onwards) |
|---|---|
|
0% on the portion up to £425,000 |
0% on the portion up to £300,000 |
|
5% on the portion between £425,001 and £625,000 |
5% on the portion between £300,001 and £500,000 |
|
Over £625,000, the first-time buyer relief cannot be claimed |
Over £500,000, the first-time buyer relief cannot be claimed |
How will this affect buyers?
For many buyers, particularly those purchasing properties over £125,000 after 31 March 2025, these changes will result in higher stamp duty costs. First-time buyers will also see a reduction in the price threshold at which they can benefit from SDLT relief.
If you're considering a property purchase, it may be worth exploring your options before these changes come into effect. Our expert team at Connells is here to guide you through the process and help you make informed decisions about your property journey.
Our advice to you
We understand that navigating property taxes can be complex. A conveyancer or solicitor will be able to provide you with clear, professional advice tailored to your individual circumstances.
And whether you are a first-time buyer, looking to move up the property ladder, or considering an investment purchase, we can help you find your next property. Start your search today.
This article does not represent advice and is for guidance only. You should seek advice from your conveyancer or solicitor.
Correct at time of publishing: 03/12/2024
MKT/CG/UKON/031224
