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Stamp Duty Changes from April 1, 2025: What Homebuyers Need to Know
From April 1, 2025, the landscape of Stamp Duty Land Tax (SDLT) in England and Northern Ireland is changing significantly. Whether you're a first-time buyer, a home mover, or investing in a second property, these changes could substantially impact your purchasing costs. Below, Farrell Heyworth summarises what's changing, who's affected, and what you can do to prepare.
Summary of Key Changes
- The zero-rate threshold for standard buyers will be reduced from £250,000 to £125,000.
- For first-time buyers, the threshold will decrease from £425,000 to £300,000.
- The first-time buyer relief cap on property values will reduce from £625,000 to £500,000.
Standard Residential Stamp Duty Rates
Until March 31, 2025:
- 0% on the first £250,000
- 5% on the portion between £250,001 and £925,000
- 10% on the portion between £925,001 and £1.5 million
- 12% on anything above £1.5 million
From April 1, 2025:
- 0% on the first £125,000
- 2% on the portion between £125,001 and £250,000
- 5% on the portion between £250,001 and £925,000
- 10% on the portion between £925,001 and £1.5 million
- 12% on anything above £1.5 million
First-Time Buyer Relief Changes
Until March 31, 2025:
- 0% on the first £425,000 (if property value does not exceed £625,000)
- 5% on the portion between £425,001 and £625,000
From April 1, 2025:
- 0% on the first £300,000 (if property value does not exceed £500,000)
- 5% on the portion between £300,001 and £500,000
Impact Examples
Example 1: Standard Buyer
Buying a property worth £295,000
- Before April 1, 2025: Total SDLT = £2,250
- After April 1, 2025: Total SDLT = £4,750
Example 2: First-Time Buyer
Buying a property worth £350,000
- Before April 1, 2025: Total SDLT = £0
- After April 1, 2025: Total SDLT = £2,500
What About Second Homes and Buy-to-Lets?
Buyers of second homes or buy-to-let properties must continue to pay an additional 3% surcharge on top of the standard SDLT rates. This surcharge remains unchanged after April 1, 2025.
For example, buying a second property for £350,000 after the changes would incur a tax bill of £27,250, compared to £22,500 if completed before the deadline.
Why Are These Changes Happening?
The reduced SDLT thresholds were introduced temporarily to boost the housing market after the pandemic. The government is now reverting to pre-2022 levels, likely to increase tax revenues and stabilise the housing market.
What Should Buyers Do?
If you're buying a home or planning to purchase it soon, it could be worth speeding up. The difference in tax - potentially thousands of pounds - could be significant. Speak with your solicitor and mortgage advisor to understand your timeline and take action accordingly.
The upcoming changes to Stamp Duty from April 1, 2025, will hit many buyers, especially those on the cusp of thresholds. With thousands of pounds at stake, acting before the deadline could make a major difference to your buying budget.
If you're unsure how this affects you, get advice from a professional. Being informed and prepared in a changing property market can make all the difference.
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