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The upcoming changes to Stamp Duty Land Tax (SDLT) in April 2025 may have a significant impact on the housing market in England and Wales.

These changes mark the end of temporary tax relief measures introduced in 2022 to support homebuyers during challenging economic times. As thresholds revert to pre-2022 levels, many buyers will face increased upfront costs when purchasing a property.

Quick Summary

• From 1st April 2025, Stamp Duty Land Tax relief, introduced in September 2022, will come to an end.
• The increase in the thresholds at which Stamp Duty Land Tax is payable will end, with the “nil rate band” reducing from £250,000 to £125,000.
• The stamp duty tax relief threshold for first-time buyers will also be reduced from £425,000 to £300,000.

What is stamp duty?

Stamp duty is a government tax that is paid as a lump sum upon the completion of a property purchase over a certain price. The tax is calculated based on the price of the property, with different rates applying as the property value surpasses certain thresholds.

The tax applies when you purchase a new property. It must be paid within 14 days of the property purchase and is usually handled by your solicitors.

How is stamp duty changing

On April 1 2025, most thresholds will drop, meaning you could go from paying zero SDLT to paying several thousand pounds or more.

From September 2022, the government announced that it would increase the nil rate threshold for Stamp Duty Land Tax from £125,000 to £250,000 for all main residences, and from £300,000 to £425,000 for first time buyers. This was in an effort to support the housing market during difficult economic times and to help get more people onto the housing ladder.

However, this was only set to remain until March 31 2025. As of April 1 2025, the nil-rate threshold for stamp duty is set to return to rates set prior to September 2022.

Example before April 2025: for homes valued at £200,000, you would not be liable to pay stamp duty tax if the purchased property is a freehold property, is your main residence, and you are a UK resident.

Example after April 2025: for homes valued at £200,000, you would be liable to pay £1,500 of stamp duty tax if the purchased property is a freehold property, is your main residence, and you are a UK resident.

Stamp duty breakdown for first-time buyers

Currently, first-time buyers are eligible for a discounted stamp duty rate of 5% on properties valued between £425,001 and £625,000. As of April 1, 2025, this discounted rate threshold will be reduced to properties valued between £300,001 and £500,000.

Note: tax is only paid on the proportion of the property value above the tax-free threshold.

Example before April 2025: for homes valued at £400,000, a first time buyer would not be liable to pay stamp duty tax, is your main residence, and you are a UK resident.

Example after April 2025: for homes valued at £400,000, a first-time buyer would be liable to pay £5,000 stamp duty tax, is your main residence, and you are a UK resident.

How to prepare for the stamp duty changes

• Reassess your budgets: additional stamp duty charges may be applicable on properties within your desired price range. Ensure you’ve accounted for any additional costs.
• Save effectively: review your savings goals and timelines to make sure you can buy the house you want in your desired timeframe.
• Stamp duty calculators: use a stamp duty calculator to get a better idea of how much you will pay on your property of choice.
• Stay up to date: whether you’re buying your first home or looking to purchase an additional property, keep up to date with the latest home moving industry news