The last Government budget introduced several policies around UK property, many of which are set to take effect in April 2025. The key change is around Stamp Duty Land Tax, which is set to have significant implications for homebuyers.
With the deadline fast approaching, we’ve broken down exactly what’s happening, how it’ll impact different homebuyer demographics and how you can prepare properly. Read on to discover how 2025 stamp duty changes will affect you.
Firstly, what is Stamp Duty?
Stamp Duty Land Tax, often abbreviated to SDLT, is a compulsory payment made whenever you purchase a property (or land) in England or Northern Ireland. You must pay SDLT during the purchase process, regardless of what you plan to use the property for.
The amount you pay depends on the value of the property, the individual buying and the current rates set out by the Government.
You can discover more Stamp Duty right here.
What are the changes to Stamp Duty Land Tax in 2025?
From April 2025, Stamp Duty rates and thresholds will change as part of an attempt to encourage growth across the housing market.
This permanent change follows a temporary one made in 2022, which increased the nil-rate threshold as part of an initiative to support first-time buyers and help boost the sector following the pandemic.
As of April 2025, anyone buying a property will have to follow the new system. If you’re buying before 1st April 2025, you’ll still follow the existing rates.
If you’re buying a main residence, the new SDLT rates are as follows:
Buying a property worth up to £125,000: 0%
£125,001 - £250,000: 2%
£250,001 - £925,000: 5%
£925,001 - £1,500,000: 10%
Above £1,500,000: 12%
Aside from the actual rate changes, the main thing to consider with these changes is that the nil-rate threshold has decreased significantly. Before these changes, buyers wouldn’t pay SDLT on a property worth up to £250,000. Now, it’s paid on a property worth over £125,000.
How is Stamp Duty changing for first-time buyers?
If you’re a first-time buyer, stamp duty rates are slightly different and will also change heading into April 2025.
From 1st April, first-time buyers will only be exempt from SDLT on properties worth up to £300,000, as opposed to the £425,000 threshold that exists currently. First-time buyers will also pay 5% on properties valued between £300,000 to £500,000. Practically, this looks like the following:
Buying a property worth up to £300,000 as a first-time buyer: 0%
Properties worth between £300,001 - £500,000 as a first-time buyer: 5%
Remember, as always, you only pay Stamp Duty on the amount above the threshold. If a property is worth £350,000, for example, you pay 5% of the £50,000 as a first-time buyer.
How can people prepare for Stamp Duty changes?
If you’re considering buying a home, it’s worth looking at how changes to Stamp Duty may impact your financial status in the future. When you buy a home, always speak to a mortgage broker or financial advisor, as they’ll be able to provide tailored advice specific to your individual circumstances. You can speak to us here at Platform or one of our recognised financial partners if you want to know more.
We have a mortgage affordability calculator that can help you work out both your eligibility and financial bottom line. Once you also know roughly how much you’ll be spending on SDLT, you can introduce that into your planning.
If you’re currently in the process of buying a property, it’s worth noting that transactions before 1st April 2025 will follow existing rates, so taking action now may help you save money in the long run.
As always, affordable home ownership schemes such as Shared Ownership can help you save a lot of money in terms of building a deposit and may impact how much you pay in SDLT, so it's worth getting in touch if you want to get on the property ladder.
