How the 2025 Stamp Duty changes will impact you
Posted March 31st 2025
What is Stamp Duty?
- Stamp Duty Land Tax (SDLT) is a mandatory tax that is applied when purchasing a property or land in England and Northern Ireland
- Land Transaction Tax (LTT) is a mandatory tax applied when purchasing a property or land in Wales
Land Transaction Tax (LTT) rates and bands remain under review, with no changes currently proposed at the time of writing.
How much stamp duty will I pay as a first-time buyer?
Before 1 April 2025, first-time buyers did not pay stamp duty on homes worth up to £425,000 in England and Northern Ireland. However, starting April 1, 2025, a 5% rate will apply to the portion of a property’s value between £300,001 and £500,000.
Example:
- Home price: £350,000
- Stamp Duty before 1 April: £0
- Stamp Duty from April 1, 2025: £2,500
From April 2025, only the £50,000 above £300,001 will be taxed at 5%, resulting in a £2,500 bill.
In Wales, first-time buyers don’t benefit from any Land Transaction Tax (LTT) exemptions or reliefs, whether the purchase is for a primary home or a rental property. That said, many properties purchased by first-time buyers fall within the £225,000 zero-rate band.
Welsh tax rates are as follows:
- No tax on the first £225,000.
- 6% on £225,001–£400,000.
- 7.5% on £400,001–£750,000.
- 10% on £750,001–£1.5 million.
- 12% on amounts above £1.5 million.
Example:
- Home price: £350,000
- Stamp Duty: £7,500
This is calculated as 6% on the £125,000 between £225,000 and £350,000.
How Stamp Duty changes will impact your sale or purchase
Previously, no stamp duty was charged on the purchase of homes priced at £250,000 or below for movers. Starting April 1, 2025, properties valued between £125,001 and £250,000 will be taxed at 2%.
Example:
- House Price: £350,000
- Stamp Duty before 1 April: £5,000
- Post-April 2025: £7,500
In 2025, 2% will apply to the portion from £125,001 to £250,000 (£2,500), and 5% will apply to the portion from £250,001 to £925,000 (£5,000), for a total of £7,500.
In Wales, buyers pay no stamp duty on the first £225,000. The rate rises to 6% for £225,001 to £400,000, then 7.5% for £400,001 to £750,000, 10% for £750,001 to £1.5 million, and 12% for anything above £1.5 million.
Example:
- House Price: £350,000
- Welsh LTT: £7,500
The 6% rate applies to the portion between £225,001 and £400,000, which totals £7,500.
What do these changes mean for owners of multiple properties?
Previsouly, a 5% stamp duty applied to investors and multiple property owners for homes priced between £0 and £250,000. From 1 April, 2025, the 5% rate will only apply to properties valued at up to £125,000.
Example:
- Home price: £350,000
- Stamp duty before 1 April: £5,000
- New stamp duty (April 2025): £25,000
The new structure will calculate 5% on the first £125,000 (£6,250), 7% on £125,001 to £250,000 (£8,750), and 10% on amounts above £250,000 (£10,000), for a total of £25,000.
Meanwhile, Land Transaction Tax (LTT) in Wales remains under review. The current rates for additional property owners are: 4% on £180,000, 7.5% on £180,001 to £250,000, 9% on £250,001 to £400,000, 11.5% on £400,001 to £750,000, 14% on £750,001 to £1,500,000, and 16% above £1,500,000.
For a £350,000 property:
- Current LTT: £21,450
This is broken down as 4% on £180,000 (£7,200), 7.5% on £70,000 (£5,250), and 9% on £100,000 (£9,000), totaling £21,450.
How will the updates impact investors and owners of multiple properties?
Previsouly, individuals with more than one property paid 5% stamp duty on properties valued between £0 and £250,000. However, from April 1, 2025, the 5% rate only applies to the first £125,000 of a property’s value.
Example:
- Property value: £350,000
- Stamp duty (previous system): £5,000
- Stamp duty (new system): £25,000
Under the revised rates, 5% will be charged on the first £125,000 (£6,250), 7% on the next £125,000 (£8,750), and 10% on amounts exceeding £250,000 (£10,000). This results in a total of £25,000.
If you are looking to buy a property this spring, start today by booking a free property valuation with our experienced local team to explore your options and get expert advice.
