Stamp Duty Land Tax (SDLT) is a tax levied on property and land purchases in England and Northern Ireland. Buyers pay SDLT as a lump sum upon completion of the transaction. The amount depends on the property’s price and the buyer’s circumstances, such as whether they are home movers, first-time buyers, or purchasing additional properties. From 1st April 2025, the thresholds at which buyers start paying SDLT will change. Below are just a few examples to demonstrate the effect of the changes due to take place.
With any property purchase, we recommend speaking to professionals to seek advice and support to understand your circumstances as there may be additional reliefs and considerations not covered here.
Previous SDLT Rates (Up to 31 March 2025)
- Residential Properties: No SDLT on the first £250,000.
- First-Time Buyers: No SDLT on the first £425,000 for residential properties worth up to £625,000.
- Second Properties: Higher rates apply, starting at 5% for properties up to £250,000.
New SDLT Rates (From 1 April 2025)
- Residential Properties: No SDLT on the first £125,000.
- First-Time Buyers: No SDLT on the first £300,000 for properties worth up to £500,000.
- Second Properties: Higher rates will increase, starting at 5% for properties up to £125,000.
Home Movers Stamp Duty Change
| Property Value | Stamp Duty Pre-April 2025 | Stamp Duty Post April 2025 |
|---|---|---|
| Up to £125,000 | Zero | Zero |
| Portion from £125,001 to £250,000 | Zero | 2% |
| Portion from £250,001 to £925,000 | 5% | 5% |
| Portion from £925,001 to £1.5million | 10% | 10% |
| Above £1.5million | 12% | 12% |
First Time Buyers Exemption Threshold Change
| Pre-April 2025 | Stamp Duty | Post April 2025 |
|---|---|---|
| £0 to £425,000 | 0% | £0 to £300,000 |
| £425,001 to £625,000 | 5% | £300,001 to £500,000 |
Second Home & Buy-To-Let Stamp Duty Changes
| Property Value | Stamp Duty Pre 31 OCT 24 | Stamp Duty Pre April 2025 | Stamp Duty Post April 2025 |
|---|---|---|---|
| Up to £125,000 | 3% | 5% | 5% |
| Portion from £125,001 to £250,000 | 7% | ||
| Portion from £250,001 to £925,000 | 8% | 10% | 10% |
| Portion from £925,001 to £1.5million | 13% | 15% | 15% |
| Above £1.5million | 15% | 17% | 17% |
Impact on Different Buyer Categories
Home Movers
For home movers, the reduction in the tax-free threshold from £250,000 to £125,000 means they will now pay SDLT on properties priced above £125,000. This change increases the upfront costs for many buyers. For example, purchasing a property worth £350,000 would incur £5,000 under the previous rates, compared to £7,500 now.
First-Time Buyers
First-time buyers now face a lower threshold for SDLT exemption/relief, having dropped from £425,000 to £300,000. This means they will pay SDLT on properties priced above £300,000. For example, purchasing a property worth £350,000 would incur nothing under the previous rates, compared to £2,500 in SDLT now.
Second Property Purchasers
Buyers of second homes and buy-to-let properties saw an increase in the surcharge from 3% to 5% in October 2024 for properties up to £250,000. This change aimed to disincentivise the acquisition of additional properties, potentially freeing up housing stock for main home buyers and first-time buyers. This has now changed to properties up to £125,000, with an increase up to 7% for properties between £125,001 and £250,000. For example, purchasing an additional property worth £300,000 would incur £17,500 under the previous surcharge, compared to £20,000 in SDLT now.
Conclusion
The change with effect from 1st April 2025 will significantly impact all buyer categories, increasing the costs associated with purchasing properties. Home movers, first-time buyers, and second property purchasers will need to carefully consider these changes when planning their property transactions.
Our recommendation is that if you are planning to buy a property soon or wonder how these changes will affect your plans, seek professional advice. To speak to us, click here for an initial call Select a Date & Time – Calendly
