Stamp Duty in 2025: what buyers need to know

From April 2025, buyers will likely pay more due to changes in Stamp Duty Land Tax. These new rules, coming into effect after March 31, 2025, mean many transactions could incur higher costs once the current holiday ends.

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

To provide certainty to taxpayers, Land Transaction Tax (LTT) rates and bands remain under review, with no changes currently proposed.

How much stamp duty will I owe as a first-time buyer?

Currently, first-time buyers in England and Northern Ireland don’t pay any stamp duty on homes costing up to £425,000. However, from April 1, 2025, a 5% stamp duty will be charged on the portion of a property’s value between £300,001 and £500,000.

Example:

• Property cost: £350,000
• Current Stamp Duty: £0
• From April 1, 2025: £2,500

This is based on taxing the £50,000 that exceeds the £300,001 threshold at 5%.

In Wales, no specific LTT benefits exist for first-time buyers, whether they’re buying to live in the property or for investment. That said, most first-time buyer properties fall near the £225,000 tax-free threshold.

The LTT rates for Wales are:

• 0% on the first £225,000.
• 6% on the portion between £225,001 and £400,000.
• 7.5% on £400,001–£750,000.
• 10% on £750,001–£1.5 million.
• 12% on anything above £1.5 million.

Example:

• Home cost: £350,000
• Stamp Duty (LTT): £7,500

This is calculated as 6% on the £125,000 between £225,000 and £350,000.

Upcoming Changes to Stamp Duty for Homeowners

Right now, movers don’t pay any stamp duty on properties worth up to £250,000. From April 1, 2025, homes priced between £125,001 and £250,000 will attract a 2% stamp duty rate.

Example:

• House Price: £350,000
• Current Stamp Duty: £5,000
• From April 2025: £7,500

The 2% rate will apply to £125,001–£250,000 (£2,500), while the 5% rate applies to the portion above £250,000 (£5,000), totaling £7,500.

In Wales, no tax is paid on the first £225,000 of a property. After that, 6% applies to £225,001–£400,000, 7.5% to £400,001–£750,000, 10% to £750,001–£1.5 million, and 12% above £1.5 million.

Example:

• House Price: £350,000
• Welsh Tax (LTT): £7,500

The 6% rate on £225,001–£400,000 results in £7,500.

How will property investors or multiple home owners be affected by the changes?
Currently, investors pay 5% stamp duty on homes valued between £0 and £250,000. Starting April 1, 2025, this 5% rate will only apply to properties priced at £125,000 or below.

Here’s an example:

• Home price: £350,000
• Current stamp duty: £5,000
• New stamp duty (from April 2025): £25,000

After April 2025, the first £125,000 will be taxed at 5% (£6,250), the next £125,000 at 7% (£8,750), and the remaining £100,000 at 10% (£10,000), resulting in a total of £25,000.

Meanwhile, in Wales, Land Transaction Tax (LTT) rates for additional properties are under review. The current rates include 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.

Example calculation:

• Home price: £350,000
• Current LTT for investors: £21,450

This total includes 4% on £180,000 (£7,200), 7.5% on £70,000 (£5,250), and 9% on £100,000 (£9,000).

To avoid increased costs, finalise your purchase by March 31, 2025. Schedule a free property valuation with our local experts today for tailored advice and an accurate home value estimate.