Understanding the 2025 Stamp Duty changes

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 remain under review, with no changes currently proposed.

What will first-time buyers pay from 1 April?

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

Example:

• Price: £350,000
• Stamp Duty before 1 April: £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.

How will the stamp duty changes impact home buyers?

Previously, home movers paid no stamp duty for properties costing £250,000 or less. Starting April 2025, homes valued from £125,001 to £250,000 will face a 2% tax rate.

Example:

• Property Price: £350,000
• Stamp Duty before 1 April: £5,000
• After April 2025: £7,500

The new rates include 2% for the portion £125,001–£250,000 (£2,500) and 5% for the amount above £250,000 (£5,000), making £7,500.

In Wales, no stamp duty is charged on the first £225,000 of a property’s price. Rates are 6% on £225,001–£400,000, 7.5% on £400,001–£750,000, 10% on £750,001–£1.5 million, and 12% beyond £1.5 million.

Example:

• House Price: £350,000
• Welsh Land Tax: £7,500

A 6% tax applies to £225,001–£400,000, equaling £7,500.

How do these changes affect those with more than one property?
Previously, property investors and owners of multiple homes paid a 5% stamp duty rate on properties valued between £0 and £250,000. Starting April 1, 2025, this rate will only apply to the first £125,000 of the property value.

Example:

• Property value: £350,000
• Previous stamp duty: £5,000
• New stamp duty from April 2025: £25,000

Under the updated rules, the first £125,000 will be taxed at 5% (£6,250), the next £125,000 at 7% (£8,750), and amounts above £250,000 at 10% (£10,000). This brings the total to £25,000.

For Wales, where Land Transaction Tax (LTT) is being reviewed, current rates for owners of multiple properties include: 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% for amounts above £1,500,000.

Example:

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

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

If you are looking to buy a property this spring, start today by booking a free property valuation with our local sales experts, , who can assess your home’s value and address any queries.