Key Stamp Duty changes in 2025: a guide for buyers

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

Land Transaction Tax (LTT) rates and bands are currently under review with no proposed changes. 

What do first-time buyers pay?

Previously, first-time buyers in England and Northern Ireland were exempt from stamp duty on homes valued up to £425,000. From April 1, 2025 however, homes priced between £300,001 and £500,000 will incur a 5% stamp duty charge.

For instance:

• Price of property: £350,000
• Stamp Duty before 1 April: £0
• From April 2025: £2,500

This charge will apply only to the portion of the home’s value exceeding £300,001—in this case, £50,000.

In Wales, no specific LTT relief or exemptions exist for first-time buyers, regardless of whether the purchase is for a main residence or an investment property. However, most first-time buyer homes fall near the £225,000 zero-rate threshold.

The Welsh system charges no tax on the first £225,000, followed by:

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

Example:

• Purchase price: £350,000
• Stamp Duty (LTT): £7,500

The 6% rate is charged on the £125,000 between £225,000 and £350,000. Total tax: £7,500.

How will the new changes influence buying or selling your home?

Before 1 April, home movers did not pay stamp duty for properties costing £250,000 or less. But from April 1, 2025, houses valued between £125,001 and £250,000 will incur a 2% stamp duty rate.

Example Breakdown:

• Home value: £350,000
• Stamp duty now: £5,000
• From April 2025: £7,500

After April 2025, the 2% rate applies to the amount between £125,001 and £250,000 (£2,500). The 5% rate applies from £250,001 to £925,000 (£5,000). This makes the total £7,500.

For those buying in Wales, no stamp duty applies to the first £225,000. Rates then increase to 6% for £225,001 to £400,000, 7.5% for £400,001 to £750,000, 10% for £750,001 to £1.5 million, and 12% for prices above £1.5 million.

Example Calculation:

• Price: £350,000
• Stamp Duty (Wales): £7,500

The 6% rate applies to the portion between £225,001 and £400,000, which equals £7,500.

How will these changes affect those with multiple properties?

Previously, owners of more than one property paid a 5% stamp duty rate on homes priced up to £250,000. As of April 1, 2025, the 5% rate will apply only to properties priced up to £125,000.

Here’s an example:

• Price of property: £350,000
• Current stamp duty: £5,000
• After April 2025: £25,000

Under the revised structure, stamp duty will include 5% on the first £125,000 (£6,250), 7% on the next £125,000 (£8,750), and 10% on the portion above £250,000 (£10,000), making a total of £25,000.

In Wales, where Land Transaction Tax (LTT) is under review, multiple property owners currently pay 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.

For example:

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

This includes 4% on £180,000 (£7,200), 7.5% on £70,000 (£5,250), and 9% on £100,000 (£9,000), totaling £21,450.

If you are looking to buy a property this spring, start today by booking your free valuation with our property experts to learn more about your home’s worth and discuss your options.