If you’re already deep into new year house hunting mode, you’ve probably seen that a stamp duty change is set to come into force from April 2025. But what are the changes that are being made, and how might it impact your buying plans?
We’ve put together a short Q&A to drill down exactly what’s changing, why it’s changing and what it means for those looking to buy in the next few months.
What is stamp duty?
This is a good place to start! Stamp Duty Land Tax (SDLT) is a government tax that’s due on home purchases over a certain value across England and Northern Ireland. The amount that’s paid is dependent the value of the home and the buyer’s personal circumstances – first-time buyers pay less, and those who own multiple properties pay a higher percentage.
What stamp duty changes are being made?
Since the autumn budget in 2022, there has been a ‘relief’ on stamp duty owed – effectively a discount for those buying a home. This is coming to an end from the new financial year, which starts in April 2025, so the tax owed will go back to ‘normal’ rates.
The main changes are that the property price from which stamp duty is payable will decrease from £250,000 down to £125,000. First time buyers currently have an additional ‘relief’ on properties where value does not exceed £625,000. The relief applies to the first £425,000 with 5% being payable on any part of the price exceeding £425,000 up to the limit of £625,000. If the price exceeds £625,000 then the relief cannot be claimed. The relief will decrease to £300,000 from April 2025 and the price must not exceed £500,000 in order for the relief to be claimed. On a purchase price of £500,000 this would increase the stamp duty payable from £3,750 to £10,000.
We have pulled together some example purchases to help demonstrate the change of stamp duty below.
| Property Value | First Time Buyer SDLT paid until 31.03.25 | First Time Buyer SDLT paid from 01.04.25 | SDLT paid until 31.03.25 | SDLT paid from 01.04.25 |
| £124,999 | £0 | £0 | £0 | £0 |
| £249,999 | £0 | £0 | £0 | £2,499 |
| £299,999 | £0 | £0 | £2,499 | £4,999 |
| £424,999 | £0 | £6,249 | £8,749 | £11,249 |
| £499,999 | £3,749 | £9,999 | £12,499 | £14,999 |
For more information, you can visit the government website here.
When do I need to pay stamp duty?
As a general rule, stamp duty needs to be paid in full within 14 days of completing on your new home – so it’s something you need to factor into your budgeting when getting your property search underway.
It works a little differently for Shared Ownership homes, as you are buying a percentage share of the property’s value instead of the full amount. SDLT is still payable on Shared Ownership homes, but there are two ways to pay it:
Stamp duty examples.
For a first time buyer if the full market value is not more than £500,000 then there would be no SDLT on the first £300,000 with SDLT at 5% on the balance. The benefit of paying this SDLT up front is that no SDLT is payable on the purchase of further shares in the future.
For a first time buyer under the new regime if the full market value is less than £500,000 and the share being purchased is less than £300,000 you would not have to pay any stamp duty at all on the share price basis. If the full market value is more than £500,000 then buyers cannot claim first time buyer’s relief even if the price of the share being purchased is not more than £300,000.
We would always recommend speaking to an Independent Financial Advisor so you have a clear understanding of what you can afford before you start viewing homes!
When do I need to reserve a home to benefit from the current stamp duty relief?
You will need to ensure you reserve your home in good time to complete your purchase by the end of March* On average sales take 6-8 weeks and we would recommend speaking with your solicitor to ensure they are confident they are able to meet the timescales. The property must be ready to move in and not under construction.
While our team is on hand at every stage of the journey, we know buying a home is a complex process that takes time. Our team will work hard to ensure you have the best chance of benefitting from the current Stamp Duty relief.*
There are a few ways you can help to streamline the process, particularly when it comes to buying a Shared Ownership home – it’s worth having a read of our latest blog on selecting a solicitor and mortgage broker.
Ready to ramp up your property hunt? Why not check out our other blogs on the buying process, or view our currently available homes here.
