---- Written by Mary Cobbina
The UK property market is gearing up for significant changes as new stamp duty tax regulations are set to take effect on 1 April 2025. If you’re considering moving homes or buying your first home, then understanding these changes and acting before the deadline could save you thousands of pounds. Use our stamp duty calculator to see how much tax you'll pay
Understanding the costs associated before starting your home-buying journey is important. One of these costs is Stamp Duty Land Tax (SDLT), which is tax paid by buyers when purchasing property or land in England and Northern Ireland. The tax helps fund public services, such as healthcare, education, and infrastructure, ensuring that the property market contributes to the UK's overall economy.
This tax is tiered, meaning the property’s value is taxed at different rates. Stamp duty tax rates will change in the coming months, and we've explored how this will affect you as a UK buyer.
How Will Stamp Duty Change in April 2025?
Starting 1 April 2025, the UK government is introducing updated thresholds and rates for stamp duty. Here’s a breakdown of how the new calculation will work compared to the current system in place.
Current Stamp Duty Rates (Until 31 March 2025)
£250,000 or less: 0%
£250,001 to £925,000: 5%
£925,001 to £1.5 million: 10%
Above £1.5 million: 12%
New Stamp Duty Rates (From 1 April 2025)
£125,000 or less: 0%
£125,001 to £250,000: 2%
£250,001 to £925,000: 5%
£925,001 to £1.25 million: 10%
Above £1.25 million: 12%
For First-Time Buyers
Until 31 March 2025, No tax for properties under £425,000
From 1 April 2025, No tax for properties under £300,000
The Key Changes:
The 0% threshold is being lowered from £250,000 to £125,000.
A 2% tier is being introduced.
The first-time buyers' tax benefit is reduced from £425,000 to £300,000.
Rates for mid-tier properties (£250,001–£925,000) will pay more tax.
High-value properties above £1.25 million will continue to attract the highest rates.
How Will Stamp Duty Tax Changes 2025 Impact Buyers?
For First-Time Buyers
The stamp duty tax changes in 2025 bring both opportunities and challenges for first-time buyers. The opportunity is that first-time buyers can still benefit from no stamp duty tax up to £300,000, and pay tax on the amount over the threshold. However, the variety of modern properties available under £300,000 is limited especially in London, where the average price for a house is over £500,000.
Good News! We’re launching a special collection of properties under £300,000 tailored for first-time buyers. These homes offer modern amenities and fall within the 0% stamp duty bracket, ensuring you pay no tax. Sign up for our newsletter to stay updated on this exclusive opportunity.
For Home Movers and Investors
Buyers upgrading their homes or investing in higher-value properties will need to act quickly to secure lower tax rates before the 31 March 2025 deadline. The slight reduction in rates for properties priced between £250,000 and £925,000 could make mid-tier homes more attractive after the changes.
However, properties above £800,000 will see higher tax rates from April 2025, emphasising the benefits of completing transactions now.
How is Stamp Duty Tax Calculated?
Up to £125,000 = 0%
The next £125,000 (the portion from £125,001 to £250,000) = 2%
The next £675,000 ( the portion from £250,001 to £925,000) = 5%
The next £575,000 (the portion from £925,001 to £1.25 million) = 10%
The final amount (the portion above £1.25 million) = 12%
Case #1: You're moving homes and buying a home for £560,000.
You will pay:
0% on the first £125,000 = £0
2% on next £125,000 = £2,500
5% on the final £310,000 = £15,500
The total stamp duty tax is £18,000
Case #2: You're upsizing and buying a high-end home for £960,000.
You will pay:
0% on the first £125,000 = £0
2% on next £125,000 = £2,500
5% on next £675,000 = £36,500
10% on the final £42,500 = £4,250
The total stamp duty tax is £42,250
Case #3: You're a first-time buyer buying a home for £350,000.
You will pay:
0% on the first £300,000 = £0
5% on the final £50,000 = £2,500
The total stamp duty tax is £2,500
Benefits Of Moving Before 1 April
Secure the current thresholds and rates, especially if you’re purchasing high-value properties. Sell before the deadline, means you will attract more buyers looking to avoid paying higher tax rates, equally important to consider listing your property soon.
Take Action Today
Whether you’re a first-time buyer, moving homes, or an investor, the upcoming stamp duty tax changes in 2025 present both opportunities and challenges. Don’t wait until the new rates take effect—explore your options now.
Check out our simple UK stamp duty calculator to see how much tax you will need to pay if you buy now and later.
About the Writer
This blog was written by Mary Cobbina, an Estate Agent and marketing expert with 12+ years in UK real estate. If you’re considering selling your property or looking to find your ideal home in South East London, contact someone who truly understands the area and its potential. Contact me today at 0203 576 5089 or email sales@theidyll.co.uk to start your journey!
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