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Stamp Duty Changes April 2025: What Buyers Need to Know

1st April 2025

From 1 April 2025, stamp duty land tax (SDLT) thresholds in England and Northern Ireland returned to their pre-September 2022 levels. The temporary higher thresholds introduced by the Liz Truss government as a cost-of-living measure have now expired, making the stamp duty changes one of the most significant shifts in home buying costs in recent years.

Whether you are a first-time buyer, a home mover or a landlord purchasing an additional property, understanding the new rules is essential before you proceed with any purchase.

The New Stamp Duty Thresholds

Standard residential purchases (home movers):

• 0% on the first £125,000 of the purchase price (previously £250,000)
• 2% on the portion from £125,001 to £250,000
• 5% on the portion from £250,001 to £925,000
• 10% on the portion from £925,001 to £1.5 million
• 12% on anything above £1.5 million

First-time buyers:

• 0% on the first £300,000 (previously £425,000)
• 5% on the portion from £300,001 to £500,000
• No first-time buyer relief on purchases above £500,000 (previously £625,000)

Buy to let and second homes: An additional surcharge of 5% applies on top of standard rates (this increased from 3% to 5% in October 2024 following the Autumn Budget).

What This Means in Practice

A first-time buyer purchasing a home for £400,000 will now pay £5,000 in stamp duty (5% on the £100,000 above the £300,000 threshold). Under the previous rules, the same purchase would have been tax-free. That is a significant additional upfront cost.

A home mover buying at £350,000 will now pay £7,500 in stamp duty: 2% on the £125,000 between £125,001 and £250,000, then 5% on the £100,000 above £250,001. Under the previous rules the same purchase would have cost £5,000. The increase is £2,500.

For buyers at the higher end of the market, the increase is more pronounced. A home mover at £600,000 will now pay £20,000 versus £12,500 under the previous rules.

Does Stamp Duty Affect Your Mortgage?

Yes, indirectly. Stamp duty is paid in addition to your deposit and cannot typically be included in your mortgage. This means buyers need to have this money available in cash at completion. If the additional stamp duty costs reduce the deposit you can put down, this may affect the loan-to-value ratio of your mortgage and therefore the interest rate available to you.

Buyers who were planning to purchase with a small deposit may need to revisit their plans. It is worth speaking to a mortgage adviser before committing to a purchase to make sure you understand the full picture of costs involved.

Planning Ahead

If you are planning to buy in 2025, budgeting correctly for stamp duty is more important than ever. Many buyers underestimate the total cost of moving, which also includes legal fees, surveyor costs, removal costs and any works needed on the new property.

A good mortgage broker will help you understand not just the mortgage product that is right for you, but also the full cost of your purchase so there are no surprises on completion day.

Speak to a Mortgage Adviser

Our advisers can help you plan your purchase, understand the stamp duty implications for your specific situation and find the most competitive mortgage product available. To get started, please submit an online enquiry or call us on 0800 310 1340.

YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT.