In April 2025, significant changes to the Stamp Duty Land Tax (SDLT) in the UK will come into effect, impacting homebuyers across the country. Home Property Law’s Charles Farrington looks at everything you need to know:
Key Changes:
- Reduced Threshold: The current SDLT threshold of £250,000 will be reduced to £125,000. This means that buyers will now pay a 2% tax on the portion of the property price between £125,001 and £250,000, and then a further 5% tax on the portion between £250,001 and £925,000.
- First-Time Buyers: The relief threshold for first-time buyers will decrease from £425,000 to £300,000. Full relief will only apply to properties price below £300,000, with partial relief available for properties valued between £300,000 and £500,000.
- Higher Rates for Additional Properties: The higher rates of SDLT on additional residential properties (e.g. second homes or buy-to-let properties) has already increased from 3% to 5%. If you are considering purchasing your second home or buy-to-let property it is important that you consider your budget and additional tax that will be payable.
Impact on Buyers:
- Increased Costs: Many buyers will face higher tax bills due to the reduced thresholds, with first-time buyers being dealt the biggest blow – for example, a first-time buyer purchasing a property for £625,000 will face an additional £11,250 in SDLT.
- Market Dynamics: The changes are expected to reduce the number of “Stamp Duty-free” homes, particularly in high demand areas like London. This could result in a decrease in property transactions and increased pressure on buyers.
What can Buyers Do?:
- Accelerate Plans: Buyers considering a move should try to complete their purchase before the changes take effect on April 1st to take full advantage of the current higher thresholds. If you are considering a purchase, you should act quickly!
- Use SDLT Calculators: The Government has a provided an online SDLT calculator which is available to everyone free of charge. Estimating the new tax under the new rules can help buyers budget and avoid unpleasant surprises.
If you are considering a move and have any queries please contact our team of experts to discuss this in more detail.
