As we write this, we are fast approaching the end of another year, and it’s been one filled with change. With new leaders attempting to steer the country in the right direction, much has been made of what they will try and do over the four years they are set to be in power. From tax to spending, from health to property, the balance sheet and landscape of the county could be vastly different to what we’ve been used to.
One aspect that has already been affected is Stamp Duty Land Tax, or SDLT. From 1st April next year, stamp duty rates are changing, and the changes will likely have wide-ranging consequences for everyone looking to buy a home.
In this edition of our blog, we take a look at how stamp duty is changing in 2025 and how it may affect you if you plan to buy a new home.
What is stamp duty?
Stamp Duty or SDLT is a tax put in place by the government that is paid by the buyer of a home upon completion of their property or land purchase. How it is applied varies, based on the value of the property and the status of the buyer.
Stamp Duty will apply when a buyer is:
- A UK resident
- A first-time buyer
- Purchasing a property as an individual or company
- Replacing a main residence
- Buying a second home
The lower the property value, the lower the amount of stamp duty due, in some cases, this can even mean no stamp duty at all. However, these changes from 1st April 2025 mean that stamp duty is now going to affect many more homeowners with considerably fewer being able to avoid it.
Why is stamp duty changing in 2025?
Since September 2022, stamp duty rates have been temporarily lowered to make property purchases more affordable. This was welcomed by those looking to buy as well as those in the property industry. Post-covid, the housing market wasn’t moving as people had hoped and affordability was becoming more of an issue. These temporary reductions are now coming to an end, and from April 1st, 2025, new stamp duty rates come into force, pushing the nil-rate threshold back to £125,000 where it previously was.
Is stamp duty going up in 2025?
In a word. Yes.
The changes to stamp duty mean that for many people buying a home, the cost this tax adds will be higher from April 1st, 2025, than it was before.
At present, there is no stamp duty due on property up to the value of £250,000. From April 1st, this value drops to £125,000, reducing the number of homes that’ll be exempt from the charge and seeing more people have to pay it. This means that anyone purchasing a property worth more than £125,001 will be charged a stamp duty fee.
First-time buyers are currently enjoying an exemption from stamp duty on homes up to the value of £425,000 but from April 1st, 2025, this zero rate will only apply to homes that cost up to £300,000. This means the tax will now apply to any first-time buyers purchasing a home over this price. In addition, first-time buyers will also see the first-time buyer’s relief only applies to properties up to the value of £500,000. At the moment, it applies to homes valued up to £625,000.
Those purchasing a second home will also see an increase in SDLT if the home is priced at more than £125,000. However, there is no change on second properties should the home cost more than £250,001.
The increases will hit first-time buyers the hardest as, typically, they have less to spend on a first home. Now, with the rises, affordability becomes slightly harder.
What will stamp duty be in 2025?
With rates rising, it’s useful to show how they may affect you should a house purchase be on the cards over the next 12 months. For comparative purposes, we have put the current rates as well as the 2025 rates below.
| Property Selling Price | Stamp Duty Rates | Stamp Duty Rate from 1st April 2025 |
| £0-£125,000 | 0% | 0% |
| £125,001-£250,000 | 0% | 2% |
| £250,001-£925,00 | 5% | 5% |
| £925,001-£1.5million | 10% | 10% |
| £1.5million+ | 12% | 12% |
Stamp duty for first-time buyers in 2025
First-time buyers will be hit the hardest by the changes to stamp duty. Where the availability of affordable property was quite wide-ranging, the rise in stamp duty will see that it is going to be much more limited.
Our table below shows how stamp duty is changing for first-time buyers in 2025 compared to its current rates.
| Property Selling Price | Stamp Duty Rate | Stamp Duty Rates from 1st April 2025 |
| Up to £300,000 | 0% | 0% |
| £300,001-£425,000 | 0% | 5% |
| £425,001-£500,000 | 5% | 5% |
| £500,001-£625,000 | 5% | 5% |
Stamp duty for second homes in 2025
If you are in the position to purchase a second home, you’ll be affected by the stamp duty changes in 2025. Where previously, you could spend up to £250,000 and only be charged 5%, the new rates mean that a house of that value will now see you pay 7% stamp duty. Our tables below show how the changes apply.
| Property Selling Price | Current Stamp Duty Rate |
| Up to £250,000 | 5% |
| £250,001-£925,000 | 10% |
| £925,001-£1.5million | 15% |
| £1.5m+ | 17% |
| Property Selling Price | Stamp Duty Rate from April 1st 2025 |
| Up to £125,000 | 5% |
| £125,001-£250,000 | 7% |
| £250,001-£925,000 | 10% |
| £925,001-£1.5m | 15% |
| £1.5m+ | 17% |
It is important to remember how stamp duty is applied. You could easily be starting to believe that the total stamp duty tax bill is much higher than it will actually be. Read our section below for some added clarity.
How stamp duty is worked out?
If you’ve got this far down the page, the numbers might be starting to send your head into a spin but don’t worry. In this section, we’ll lay it all out so you get a clearer idea of what you might owe.
The stamp duty rate applies to the portion of the property that falls within the relevant price band. For example, let’s assume you are purchasing a house for £500,000 after April 1st, 2025. You’ll pay a 2% stamp duty on the first £250,000 of the property value, and then 5% on the 2nd £250,000. This gives you a total stamp duty bill of £15,000.
This is because up to £250,000 is charged a 2% stamp duty and from £250,001-£925,000 is charged a 5% stamp duty.
We’ll give another example. In our first example, we were buying that home as a main residence. Let’s now buy it as a first-time buyer. With the new stamp duty rates, our bill will be £10,000.
This is because up to £300,000 remains exempt from stamp duty, but the remaining £200,000 that makes up the £500,000 total is charged at 5% stamp duty.
Can I avoid stamp duty changes in 2025?
The best way to do this is to try and sell your home now so you can buy a new one even quicker. If you can complete before March 31st, 2025, you’ll still be eligible for the old rates and this could save you over £6,000 as a first-time buyer and almost £3,000 as a mover.
Stamp duty in 2025 will put pressure on buyers to be more resourceful with their house hunting and potentially save for longer before deciding on whether to move. Whilst this may not be ideal, it might be the easiest way to help cover a bill that was perhaps previously not an issue. Speak to our team at Mortgage Saving Experts. In our role as a mortgage broker, we can help find the most affordable deals for your next property adventure, saving you money and helping you make that SDLT a whole lot more affordable.
