Upcoming Changes to Stamp Duty (From 1 April 2025).

Stamp Duty Land Tax (SDLT, or Stamp Duty) is a tax payable to HM Revenue and Customs (HMRC) when buying a property or land in England and Northern Ireland.

The amount of SDLT liability will depend on several factors, including (but not limited to) whether a buyer is:

• a UK resident
• purchasing a property as an individual or company
• a first-time buyer
• replacing a main residence
• purchasing additional property

In September 2022, the Government announced a temporary increase to the thresholds above which SDLT must be paid. The temporary increase is due to end on 31 March 2025, meaning that any transaction which completes thereafter will be subject to the increased rates of Stamp Duty. While this date might seem far away, buyers and sellers alike ought to be aware that an average residential property transaction takes between 12 and 16 weeks to complete, but can, in certain circumstances take much longer. Typically, these circumstances are generally only uncovered during a transaction. It is also worth bearing in mind that this timeframe does not take into consideration the time it may take to attract a buyer from the date the property is first listed.

The current Stamp Duty rates (September 2022 to 31 March 2025) 

On a standard residential purchase of a freehold property, for an individual who is a UK resident and replacing a main residence, are as follows:

• 0% up to £250,000
• 5% above £250,000 and up to £925,000
• 10% above £925,000 and up to £1,500,000
• 12% above £1,500,000

On 1 April 2025, there are several changes coming into effect, and it is currently unclear whether any further amendments will be made to Stamp Duty between now and then.

• The nil rate threshold, which is currently £250,000, will return to the previous level of £125,000.
• The nil rate threshold for first time buyers, which is currently £425,000, will return to the previous level of £300,000.
• The maximum purchase price for which First-Time Buyers Relief can be claimed is currently £625,000 and will return to the previous level of £500,000.

Stamp Duty rate from 1 April 2025

The Stamp Duty rates on a standard residential purchase of a freehold property, for an individual who is a UK resident and replacing a main residence, will be as follows:

• 0% up to £125,000
• 2% above £125,000 and up to £250,000
• 5% above £250,000 and up to £925,000
• 10% above £925,000 and up to £1,500,000
• 12% above £1,500,000

According to Zoopla, in the last 12 months, the average detached property was sold for £561,605, a semi-detached property for £354,767, and a terraced property for £293,303. We have detailed below the Stamp Duty liability for each of these averages at the current rate, and the rate following 31 March 2025 below. 

By completing a property purchase before the Stamp Duty changes come into effect, a buyer can save a significant £2,500. However, this is different for second homeowners (investors) and companies.

It may be worthwhile for residential buyers to bring forward their plans to take advantage of the current Stamp Duty rates before the increase takes effect.

First time buyers

The Stamp Duty changes are likely to have the most significant impact on first time buyers. Reducing the nil rate threshold by £125,000, and reducing the maximum purchase price for which first-time buyers’ relief can be claimed by the same amount, may mean that first time buyers have no other choice but to wait even longer to get on the property ladder. 

For first-time buyers the rate will be as follows:

Being aware of these changes and understanding the future landscape of Stamp Duty may assist you in realising your plans sooner rather than later to take advantage of substantial savings.

For the latest information about Stamp Duty Land Tax rates, please click here to access the UK Government website.

And here is a direct link to the UK Government Stamp Duty calculator.