How the 2025 Stamp Duty changes will impact you

Starting April 2025, changes to Stamp Duty Land Tax are expected to significantly increase costs for buyers. Any transactions completed after March 31, 2025, will fall under the new rules, potentially leading to higher tax bills for many.

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?

In England and Northern Ireland, first-time buyers don’t currently pay stamp duty on homes worth up to £425,000. 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 now: £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

As of now, no stamp duty is 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
• Current Stamp Duty: £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?
At present, a 5% stamp duty applies to investors and multiple property owners for homes priced between £0 and £250,000. From April 1, 2025, the 5% rate will only apply to properties valued at up to £125,000.

Example:

• Home price: £350,000
• Stamp duty currently: £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.

Act now to avoid increased costs by completing your purchase before March 31, 2025. Schedule a free valuation with our team for expert advice on your next steps.

How will the updates impact investors and owners of multiple properties?

Currently, individuals with more than one property pay 5% stamp duty on properties valued between £0 and £250,000. However, from April 1, 2025, the 5% rate will only apply to the first £125,000 of a property’s value.

Example:

• Property value: £350,000
• Stamp duty (current 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.

In Wales, where the Land Transaction Tax (LTT) is being reviewed, additional property owners currently face a 4% rate on the first £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% for anything above £1,500,000.

For example:

• Property price: £350,000
• Current LTT: £21,450

This calculation breaks down into 4% on £180,000 (£7,200), 7.5% on £70,000 (£5,250), and 9% on £100,000 (£9,000), totaling £21,450.

To avoid higher costs, consider completing your purchase before March 31, 2025. Book a free property valuation with our experienced local team to explore your options and get expert advice.