2025 Stamp Duty changes: How New Rules Will Affect Property Transactions

Adjustments to the Stamp Duty Land Tax rules, set to take effect in April 2025, may raise costs for many buyers. Properties purchased after March 31, 2025, will no longer benefit from the current holiday, potentially leading to higher amounts payable.

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.

What do first-time buyers currently pay?

In England and Northern Ireland, first-time buyers don’t pay stamp duty on homes worth up to £425,000. However, this will change from April 1, 2025, when properties priced between £300,001 and £500,000 will attract a 5% stamp duty charge.

Example:

• Price: £350,000
• Current Stamp Duty: £0
• From April 2025: £2,500

The tax will apply only to the £50,000 above £300,001.

In Wales, there are no reliefs or exemptions for first-time buyers under the Land Transaction Tax (LTT) system, whether buying a primary residence or an investment. Many properties still fall within the £225,000 tax-free threshold.

LTT rates are:

• 0% on up to £225,000.
• 6% on £225,001–£400,000.
• 7.5% on £400,001–£750,000.
• 10% on £750,001–£1.5 million.
• 12% above £1.5 million.

Example:

• Cost of property: £350,000
• LTT paid: £7,500

This is calculated as 6% on the £125,000 above £225,000.

Stamp Duty Adjustments: What Do They Mean for Buyers and Sellers?
Currently, home movers are exempt from stamp duty on homes priced up to £250,000. However, from April 1, 2025, homes valued between £125,001 and £250,000 will incur a 2% stamp duty rate.

Example Calculation:

• Property Value: £350,000
• Stamp Duty Now: £5,000
• From April 2025: £7,500

Under the new rules, 2% is charged for the range £125,001–£250,000 (£2,500), and 5% is added for amounts above £250,000 (£5,000), bringing the total to £7,500.

For Wales, the first £225,000 of a property is tax-free. After this threshold, rates are 6% on £225,001–£400,000, 7.5% on £400,001–£750,000, 10% on £750,001–£1.5 million, and 12% for amounts exceeding £1.5 million.

Example:

• House Value: £350,000
• Welsh LTT Payment: £7,500

The 6% rate is applied to £225,001–£400,000, resulting in £7,500.

What do the upcoming changes mean for investors and multi-property owners?
Currently, owners of additional properties are subject to a 5% stamp duty rate on homes priced from £0 to £250,000. Starting April 1, 2025, this rate will only apply to properties priced at £125,000 or below.

Example calculation:

• Purchase price: £350,000
• Current stamp duty: £5,000
• Stamp duty from April 2025: £25,000

Under the new system, stamp duty will include 5% on the first £125,000 (£6,250), 7% on the next £125,000 (£8,750), and 10% on the remaining £100,000 (£10,000), bringing the total to £25,000.

For Welsh properties, Land Transaction Tax (LTT) is still under review. Current rates for multiple properties are 4% on the first £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:

• Property value: £350,000
• Current LTT: £21,450

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

To avoid increased charges, aim to finalise your purchase before March 31, 2025. Schedule a free property valuation today with our knowledgeable team to get started.