Stamp duty changes 2025: what does it mean for you?

Stamp duty in the UK is changing from April 2025, impacting first-time buyers and existing homeowners. We explore the key changes to stamp duty for all types of buyers, how the thresholds have changed, and how this will impact your purchase.

Whether you're an existing homeowner who may need to pay a bit more or a first-time buyer who has gone from needing to pay no stamp duty, to potentially thousands, we break it all down.

Stamp duty land tax is a lump sum payment you make to the government after completing your property purchase. This tax needs to be paid within 14 days of completing your purchase

How much you pay depends on the property purchase price and your buyer status - whether you're an existing homeowner switching main residence, a first-time buyer, or purchasing a second home or buy-to-let property.

You need to pay stamp duty in England when buying a freehold, leasehold, or shared ownership property.

Remember that SDLT only applies to properties in England and properties above thresholds. If the property you're purchasing is in Wales, different rates apply under Land Transaction Tax (LTT). And if you fall below the thresholds, you won’t owe any stamp duty.

In September 2022, the Conservative Government temporarily lowered SDLT thresholds to make it more affordable to buy a home, especially for first-time buyers. However, by 31st March 2025, these changes came to an end and rates returned to what they were before September 2022.

When budgeting for your property purchase, remember to factor in these updated stamp duty costs. The end of this relief scheme represents a significant shift in the property tax landscape that could add to your overall moving costs.

The new stamp duty rates/thresholds came into effect on April 1^st, 2025 – if you’re in the process or thinking about buying a home, you’ll need to consider these thresholds.

What you'll pay in stamp duty depends on your status as a buyer and your purpose for purchasing.

Different types of buyers face different rates - a first-time buyer will have different thresholds to someone buying their next home or an additional property.

With the 2025 threshold changes, many buyers who would previously pay no stamp duty now face new charges, while others will see increased amounts.

Understanding exactly how these new thresholds affect you can help you prepare financially and avoid surprises during your property journey.

Here’s a breakdown of how 2025 stamp duty changes might impact you:

• If replacing your main residence, the zero-rate threshold has been lowered from £250,000 to £125,000 from April 1, 2025, resulting in a new 2% rate on the purchase price portion between £125,001-£250,000 (see other bands below).
• First-time buyers have a £300,000 zero-rate threshold but will now pay 5% (instead of 0%) on the portion between £300,001-£500,000, and the relief ceiling drops from £625,000 to £500,000.
• Buy-to-let and second home purchases will see increased rates from April 2025 compared to previously, with the property price portion £125,001-£250,000 band rising from 5% to 7% (see other bands below).

If you're selling your home and moving to a new property as your main residence, your stamp duty rates will be as follows:

The zero-rate threshold has lowered from £250,000 to £125,000.

For example, if you're buying a property that is £500,000, you'll now pay 2% stamp duty on the property price portion between £125,001 and £250,000 and 5% on the portion between £250,001 and £500,000.

This means your total stamp duty bill would be £2,500 for the first band (2% of £125,000) plus £12,500 for the second band (5% of £250,000), totalling £15,000.

Yes, first-time buyers do pay stamp duty. However, you'll benefit from a higher zero-rate threshold of £300,000.

Here's a breakdown of how the first-time buyer thresholds have changed:

Buying a property under £300,000? Great - you'll owe no stamp duty. For properties between £300,001 and £500,000, you'll pay 5% on the portion above £300,000.

The first-time buyer relief ceiling has changed from £625,000 to £500,000. This means if you're purchasing a property over £500,000, you're no longer entitled to first-time buyer relief and will instead pay the standard rates that apply to single property main residence (noted above).

Buying an additional property (such as a second home or buy-to-let) means your stamp duty thresholds look like this:

For example, purchasing a £300,000 buy-to-let property after April 1st 2025, stamp duty costs will look like this:

• 5% on the portion £0 to £125,000 = £6,250
• 7% on the portion £125,001 to £250,000 = £8,750
• 10% on the final portion up to £300,000 = £5,000
• Total stamp duty = £20,000

Wales has its own version of stamp duty called Land Transaction Tax (LTT). LTT operates with different thresholds and rates compared to the Stamp Duty Land Tax used in England.

The Welsh government reviews these rates independently from the UK government, so changes to SDLT do not automatically affect LTT thresholds or rates.