Stamp Duty Land Tax (SDLT), the tax placed on purchases of property or land, will change following the increase to the thresholds at which buyers would start paying tax which was announced in the September 2022 Mini Budget.
How this change will affect prospective buyers differs based upon certain circumstances, but generally this means that the amount of tax home buyers pay is going to go up.
How will the changes affect me?
This all depends on your circumstances, chiefly how much the property you’re looking to buy costs, and whether you’re a first time buyer or not. There are additional factors which may change the amount of Stamp Duty you need to pay, such as whether you’re a UK resident and whether you own more than one property.
Rate changes for purchasing a single property
We’ve broken down how the rates will change from April 1st for those looking to purchase a single residential property when they are not a first time buyer.
Stamp Duty charges up to 31st March 2025
|
Value of property |
Stamp Duty rate |
|
Up to £250,000 |
Zero |
|
From £250,001 to £925,000 |
5% |
|
From £925,001 to £1,500,000 |
10% |
|
Anything above £1,500,000 |
12% |
Stamp Duty charges from 1st April 2025
|
Value of property |
Stamp Duty rate |
|
Up to £125,000 |
Zero |
|
From £125,001 to £250,000 |
2% |
|
From £250,001 to £925,000 |
5% |
|
From £925,001 to £1,500,000 |
10% |
|
Anything above £1,500,000 |
12% |
What that could look like from April 1st 2025
We’ve taken a look at what these changes could mean against a property that costs £300,000. Stamp Duty would be calculated as follows:
· 0% on the initial £125,000 = £0
· 2% on the next £125,000 = £2,500
· 5% on the remaining £50,000 = £2,500
· Total Stamp Duty to pay = £5,000
Rate changes for first time buyers
Those purchasing a property for the first time can claim a discount on Stamp Duty but, again, the rules around how this discount will apply will differ following 1 April changes.
Stamp Duty charges for first time buyers up to 31st March 2025
|
Value of property |
Stamp Duty rate |
|
Up to £425,000 |
Zero |
|
From £425,001 to £625,000 |
5% |
If the property is valued more than £625,000 this discount cannot be claimed. If this is the case, the same rules around Stamp Duty charges for those who have bought a property before will apply.
Stamp Duty charges for first time buyers from 1st April 2025
|
Value of property |
Stamp duty rate |
|
Up to £300,00 |
Zero |
|
From £300,001 to £500,000 |
5% |
If the property is valued more than £500,000 the discount cannot be claimed. If this is the case, the same rules around Stamp Duty charges for those who have bought a property before will apply.
What that could look like for first time buyers from 1st April 2025
We’ve taken a look at what these changes could mean for a first time buyer purchasing a property that costs £500,000. Stamp Duty would be calculated as follows:
· 0% on the initial £300,000 = £0
· 5% on the remaining £200,000 = £10,000
· Total Stamp Duty to pay = £10,000
Our Stamp Duty Calculator can help you work out how much you could pay, based on your circumstances.
Mortgage expert, Dale Knight comments:
“Stamp Duty can be an additional obstacle for those looking to buy for the first time and increases like this will just put more pressure on people to save more and possibly delay their plans.
“New mortgage products to help support those with smaller deposits, and advisers being able to discuss such options, especially for first time buyers, will be key in helping people still achieve their home moving goals despite the Stamp Duty increase.”
Important information
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
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