Major Stamp Duty Changes Coming April 1, 2025: What Property Buyers and Sellers Need to Know

A number of Stamp Duty changes come into effect on 1 April 2025. These changes will impact most people buying or selling properties. Even if you are not directly impacted, you are likely to be indirectly affected if someone else in the chain becomes liable to pay stamp duty at the higher rates.

Historically, when Stamp Duty rates have changed, some buyers who missed the deadline sought a price reduction to offset the additional duty.

The changes will affect first-time buyers, second-home purchases, and those purchasing a new main residence.

First-time buyers

If you are a first-time buyer, it’s important to be aware of the upcoming changes to Stamp Duty Land Tax. Currently, first-time buyers do not pay any stamp duty on properties under £425,000. They only pay 5% on the portion of the purchase price between £425,000 and £625,000. However, from 1 April 2025, this threshold will drop to £300,000. Additionally, they will only be able to claim the reduced 5% rate (first-time buyer relief) on properties between £300,000 and £500,000. Therefore, from 1 April 2025, if you are a first-time buyer and purchase a property over £500,000, you will pay stamp duty at the “normal rate.”

To illustrate, here are two examples:

Scenario A – Purchase price of £400,000
From 1 April 2025, a first-time buyer will pay stamp duty of £5,000, compared to £0 if the purchase is completed prior to 1 April 2025.

Scenario B – Purchase price of £625,000
From 1 April 2025, a first-time buyer will pay stamp duty of £21,250, compared to £10,000 if the purchase is completed prior to 1 April 2025.

Replacing your main residence

For those moving and replacing their main residence, the nil-rate threshold will be reduced from £250,000 to £125,000. This means they will pay stamp duty at the rate of 2% on the portion of the purchase price between £125,001 and £250,000. In real terms, this could increase stamp duty by £2,500.

Buying a second home

Lastly, if you are purchasing a second property, the government has introduced an extra band. Prior to 1 April 2025, you would pay stamp duty at 5% on the portion of the purchase price up to £250,000. After 1 April 2025, the rate will be 5% on the portion up to £125,000, and 7% on the portion between £125,001 and £250,000. The rates for any portion above £250,000 will remain the same. In real terms, this change could increase stamp duty by £2,500.

Are you looking for professional solicitors to help you with buying or selling a house? Our team of experienced property conveyancing solicitors can provide expert guidance and support.

We can help you navigate each step with confidence and will work tirelessly to ensure a smooth process. To learn more about how our solicitors can help, please get in touch with our friendly team today on 01329 822 333

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