Stamp Duty Land Tax Changes
Stamp Duty is a tax in England that is levied on the buyer of a property upon completion of the transaction. The amount due may vary based on several factors, including the value of the property and the buyer’s status, such as whether they are a first-time buyer, purchasing a second home, or relocating.
In the Autumn Budget 2024, the UK government announced forthcoming changes to Stamp Duty, which will take effect on April 1, 2025. These changes will apply to all property transactions that are completed on or after that date, regardless of when the agreement was reached.
The changes only affect England, not Wales where LTT is payable.
This article aims to outline the upcoming changes and their potential implications for you. For a comprehensive overview of the Stamp Duty changes, please refer to the full government guidelines.
- Stamp duty rates for main residences are changing
Under the new regulations, buyers will be subject to a 2% Stamp Duty on the portion of the property price that falls within the range of £125,001 to £250,000. The Stamp Duty rate on any portion of the property price exceeding £250,000 will remain unchanged.
This means that if you are purchasing a property valued above £125,000, you will be responsible for additional Stamp Duty starting in April 2025.
- Stamp Duty Rates for Additional Buyers
The Stamp Duty rates for additional properties are also undergoing changes. These new regulations will apply to all individuals purchasing a second home, including landlords and buy-to-let investors.
With the forthcoming changes, the stamp duty on the portion of the property price between £125,001 and £250,000 will increase to 7%, while the stamp duty rates for amounts exceeding this threshold will remain unchanged.
- First Time Buyer Rate Change
An individual is regarded as a first-time buyer if they have not previously owned any property, regardless of location. Effective from April 2025, eligibility for the reduced rates will require that all individuals involved in the purchase are first-time buyers and that the property price is £500,000 or below.
From 1st April 2025, first-time buyers will be able to acquire a property valued under £300,000 without incurring any Stamp Duty.
Commencing in April 2025, first-time buyers will be required to pay 5% Stamp Duty on the portion of the property price that exceeds £300,000 and is up to £425,000. For properties priced above £500,000, first-time buyers will be subject to the standard Stamp Duty rates applicable to all buyers.
March 31, 2025