Stamp Duty Land Tax is a tax that is paid by those who purchase property in England and Northern Ireland. From 1st April 2025, new stamp duty rates will come into effect, which will impact homebuyers, first-time buyers, investors and those purchasing second properties.
The changes could mean higher costs for some buyers, so it’s essential for anyone looking to buy a home in 2025 to understand these new thresholds. As one of the leading removal companies in the UK, we’ve put together this simple guide to break down the new stamp duty rates, explain how they compare to the current system, and explore what it could mean for your next move.
The amount of stamp duty that will be payable will vary depending on the purchase price of the property and the circumstances of the buyer.
The current standard stamp duty rates are:
These rates apply to buyers purchasing their main residence. However, different rules and reliefs exist for first-time buyers and those purchasing additional properties.
First-time buyers benefit from stamp duty relief, which means they will pay less tax when purchasing a home that’s worth up to £625,000.
The rates for eligible first-time buyers are:
If the property price exceeds £625,000, first-time buyer relief is not available, and standard rates will apply to the full amount.
If you’re buying a second home or a buy-to-let property, a 5% surcharge will apply on top of the standard stamp duty rates. This amounts to:
The surcharge will apply if you already own another residential property anywhere in the world and will not be selling your existing main home at the same time. If you sell your previous main home within three years, you may be eligible for a refund of the additional tax.
If you buy a £295,000 home as your main residence and you’re not a first-time buyer, you will pay:
If the same property is bought as a second home or buy-to-let, you will pay:
From 1st April 2025, new stamp duty rates will come into effect, which will reduce the tax-free threshold and increase the amount some buyers will pay. The changes will affect anyone purchasing residential property in England and Northern Ireland, including first-time buyers, home movers and those buying additional properties.
The new standard stamp duty rates for 2025 will be:
The most significant change is the reintroduction of stamp duty at 2% for properties priced between £125,001 and £250,000. Under the previous system, this portion was tax-free.
First-time buyer relief is set to continue, but the 0% threshold will drop from £425,000 to £300,000.
The new stamp duty rates for first-time buyers are:
If the property price exceeds £500,000, standard stamp duty rates will apply to the full amount. This means fewer first-time buyers will qualify for full relief, which will increase costs for those purchasing homes above £300,000.
Buyers of second homes and buy-to-let properties will still need to pay an additional 5% surcharge on top of the new stamp duty rates.
The updated rates will be:
If you buy a £295,000 home as your main residence from April 2025, and you’re not a first-time buyer, you’ll pay:
If the same property is bought as a second home or buy-to-let, you’ll pay:
The upcoming changes to stamp duty from 1st April 2025 will affect different types of buyers in various ways. Whilst some will see only a small increase in tax, others, particularly those purchasing in the mid-range property market, could face significantly higher costs.
First-time buyers currently benefit from relief on properties up to £625,000, with no tax due on the first £425,000. From April 2025, this 0% threshold will be reduced to £300,000, meaning those buying homes between £300,000 and £425,000 will now need to pay 5% tax on the portion above £300,000.
For example:
While first-time buyers purchasing below £300,000 remain unaffected, those looking at higher-value homes will need to budget for an increased tax bill.
In addition, the maximum property price for stamp duty relief for first-time buyers will decrease from £625,000 to £500,000 from April 2025. This means first-time buyers will no longer benefit from relief on properties above £500,000.
For home movers, i.e., those selling their current property and buying another, the biggest impact will come from the reduction of the tax-free threshold from £250,000 to £125,000. This means buyers in this category will now face a 2% tax on the portion between £125,000 and £250,000, whereas before, this was tax-free.
For example:
Buyers at the lower end of the market will feel the biggest change, as the introduction of tax on properties between £125,000 and £250,000 will increase the cost of moving. Those buying homes above £250,000 will also pay more but will see a smaller percentage increase overall.
Buy-to-let investors and those purchasing second homes will continue to pay a 5% surcharge on top of the standard stamp duty rates. However, because the underlying tax rates are increasing, their overall costs will rise, too.
For example, a buyer purchasing a £295,000 second home:
For landlords and property investors, the higher stamp duty costs could potentially reduce profitability, particularly on lower-value investments where a greater percentage of the purchase price will now be subject to tax.
While the changes to stamp duty in April 2025 may increase the cost for many homebuyers, there are several strategies that could help minimise what you have to pay. Whether you are a first-time buyer, a home mover or purchasing a second home, there are ways to reduce the amount you pay.
One of the most straightforward strategies to avoid the higher stamp duty rates from April 2025 is to complete your purchase before the changes take effect. By acting now, you can lock in the current, lower stamp duty rates and avoid the increases in tax liability.
If you’re already in the process of buying a property or considering a move, it’s worth advancing your purchase to try to avoid the higher rates. This may require moving quickly by working closely with your solicitor or estate agent to ensure a smooth transaction.
If you’re a first-time buyer, you may still be eligible for stamp duty relief, but the criteria are changing. As mentioned, the threshold for first-time buyers will reduce to £300,000 in April 2025, meaning you’ll still benefit from full relief if you buy a home below this price.
To maximise your savings, you can stay within the £300,000 limit to ensure you pay no stamp duty. If your dream home is priced between £300,000 and £500,000, you can still benefit from some relief, but you’ll be charged 5% on the portion above £300,000. If your property exceeds £500,000, first-time buyer relief will not apply at all, and you’ll need to pay standard rates.
When purchasing a home, the price can have a significant impact on the amount of stamp duty you’ll pay. Since the new stamp duty rates from April 2025 will be more heavily tiered, you could save money by carefully considering your property price bracket. If you’re close to a threshold, consider whether you could adjust your budget to stay below a certain price point, so you could reduce your stamp duty costs.
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