Residential Property partner, Claire Pays outlines the changes to the stamp duty amounts that come into effect from 1 April 2025.
The current position
New stamp duty thresholds were introduced in September 2022 as part of the Stamp Duty Land Tax (Temporary Relief) Bill which lowered the stamp duty amounts payable until 31 March 2025.
The stamp duty thresholds currently in place until 31 March 2025 increased the amount that a purchaser can pay for a residential property before they become liable to Stamp Duty Land Tax (SDLT). It increased the residential nil-rate tax threshold from £125,000 to £250,000.
The nil-rate threshold for First Time Buyers’ Relief was also increased from £300,000 to £425,000. The maximum property value that is eligible for First Time Buyers’ Relief was also increased to £625,000 from £500,000.
What is stamp duty?
Stamp duty, or Stamp Duty Land Tax (often abbreviated to SDLT), is a tax applied by the government to the purchaser of a residential property purchased at over £125,000, or £40,000 for second properties.
It must be paid within 14 days of completing the purchase of a residential property.
How much do I have to pay?
The amount you pay depends on when you bought the property, how much you paid for it and whether you are eligible for relief or exemption.
There are different rates of SDLT when buying a residential property, the rate you pay will depend on whether you:
• are a first-time buyer.
• already own a property and are buying an additional property.
• you’re not a UK resident.
Stamp duty rates from 1 April 2025
Stamp duty rates will revert back to the previous rate from 1 April 2025. Completion must take place by 31 March 2025 to be able to benefit from the temporary lower rate introduced, it will not matter if you have exchanged, the deciding date is the completion date.
Those purchasing an additional residential property will typically pay an additional 5% on top of the standard rate:
Rates if you’re buying your first home
You’re eligible to claim the relief if you and anyone else you’re buying with are first-time buyers. From 1 April 2025 if the property price is over £500,000, you follow the rules for people who have bought a home before.
Currently first-time buyers pay no stamp duty when buying a home worth £425,000. This threshold will drop to £300,000, meaning they will go from paying nothing to paying £6,250 on stamp duty. This means first-time buyers purchasing for £350,000 or more will be the most affected by the stamp duty change on the 1 April..
As your conveyancers, we manage the stamp duty on your behalf as part of your purchase, and we will include this as part of our quote for conveyancing.
Your lawyer will be happy to advise if you have any queries about SDLT or these changes. You can also use the government’s Stamp Duty Land Tax (SDLT) calculator to work out the SDLT on your purchase.
About the Author
Claire Pays is a residential property partner at our West Wickham office. Claire specialises in conveyancing and can help you buy or sell your home.
