How is stamp duty changing in 2025?

Stamp Duty Land Tax (SDLT) rates are changing from April 1st 2025, potentially adding thousands of pounds to a property purchase.

The temporary increases to stamp duty thresholds in September 2022 are coming to an end and are soon going to impact the UK housing market, with first-time buyers likely to be the most affected.

As optimism grows within the industry over new home registrations, home buyers’ pockets are about to be hit with the change to stamp duty.

What, when and how is it changing, though? Continue reading to find out everything.

What is stamp duty?

Stamp duty is a tax imposed by the UK government that a buyer has to pay when purchasing a property. SDLT is paid when the price of the property in question is purchased over a certain price bracket.

The amount of stamp duty that’s required to be paid depends on a range of factors, including whether the buyer is:

• A UK resident
• A first-time buyer
• Purchasing a property as an individual or company
• Replacing their current property
• Purchasing an additional property

Why is stamp duty changing in 2025?

In 2022, the Conservative government announced changes to stamp duty that increased the threshold above which SDLT must be paid from £125,000 to £250,000 – giving a maximum saving of £2,500 for home buyers.

The threshold for first-time buyers also increased from £300,000 to £425,000.

The reason that SDLT is changing in 2025 is that the changes in 2022 were only temporary, until March 31st 2025. This means the increase in the residential nil-rate threshold will end on this date.

What are the stamp duty changes?

From April 1st 2025, there will be several changes to how SDLT is charged.

For starters, the nil rate threshold – currently £250,000 – will return to its previous level of £125,000. Likewise, the nil rate threshold for first-time buyers will also return to its previous level of £300,000, from £425,000.

Finally, the maximum purchase price for which First-Time Buyers Relief can be claimed is currently set at £625,000 and will return to its previous level of £500,000.

What are the current stamp duty rates for a person’s main residence in the UK?

• Up to £250,000 – 0%
• £250,001 to £925,000 – 5%
• £925,001 to £1.5 million – 10%
• Over £1.5m – 12%

What will the stamp duty rates be from April 1st 2025?

• Up to £125,000 – 0%
• £125,001 to £250,000 – 2%
• £250,001 to £925,000 – 5%
• £925,001 to £1.5 million – 10%
• Over £1.5m – 12%

How much impact will the stamp duty changes have on first-time buyers?

It’s believed that first-time buyers are likely to feel the biggest impact from the stamp duty changes in 2025.

From April 2025, first-time buyers will not need to pay SDLT on properties up to £300,000. Before this date, first-time buyers could purchase a home up to £425,000 without paying SDLT.

For example, if a first-time buyer purchases a home after April 1st 2025 for £350,000, they’ll be expected to pay the 5% rate of stamp duty, totalling £2,500.

However, if they completed the property purchase in March 2025, they would pay nothing in SDLT.

How will stamp duty rates change for an additional property?

Anybody purchasing an additional property will also feel the effects of the new stamp duty changes in 2025.

The current rate of SDLT for an additional property is:

• Up to £250,000 – 5%
• £250,001 to £925,000 – 10%
• £925,001 to £1.5 million – 15%
• Over £1.5m – 17%

The new rate from April 1st is:

• 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%

Speak to ABC+ Warranty for home warranties and more

With stamp duty returning to its highest level since 2022, many people are rightly concerned with the rising cost of house purchases.

With house prices expected to rise again in 2025, the stamp duty changes may have an impact on the housing market.

Fortunately, at ABC+ Warranty, we’re always keeping up to date with the latest industry news and trends. You can, too, by checking out our other news articles and blogs.

Plus, if you’re looking to purchase a property, have a look through our building warranties.

For anything else, don’t hesitate to contact us by calling 0161 928 8804.