From 1st April 2025, significant changes to Stamp Duty Land Tax (SDLT) will come into effect, impacting property buyers across the UK. These changes mark the end of the temporary increases to the thresholds that were introduced in September 2022.

Stamp Duty, or Stamp Duty Land Tax (SDLT), is a tax levied on the purchase of residential property in England and Northern Ireland and is paid by the buyer within 14 days of completion, although it is usually settled by the conveyancer on behalf of the buyer on completion, as part of the legal process.

The amount of SDLT liability depends on several factors, including the property's price, the buyer's residency status, and their status as a buyer whether it’s a home move, they’re a first-time buyer or they’re purchasing additional property. The rates increase proportionately with the price paid for the property.

The key changes to SDLT rates from 1st April 2025 are:

• The most impact will be caused by the nil rate threshold, which is currently £250,000 but returning to the previous level of £125,000. The next ‘portion’ of £125,000 will be liable at 2%.
• For first-time buyers, the nil rate threshold will drop from £425,000 to £300,000. This means that first-time buyers will now pay 5% SDLT on the portion of the price paid between £300,000 and £500,000.
• The maximum purchase price for which First-Time Buyers Relief can be claimed will decrease from £625,000 to £500,000. For first timers buying a property above £500,000, the standard £125,000 threshold will apply.

Buyers purchasing additional properties (buy-to-let and second homes) will continue to face a 5% surcharge on top of the standard SDLT rates, and for overseas buyers, the surcharge remains at 2%.

All buyers will see an increase in SDLT costs due to the lower nil rate threshold. For instance, the SDLT liability for a property worth £348,000 will increase from £4,900 to £7,400, worked out as 0% on the first £125,000, 2% on the second £125,000 and 5% on the remaining £98,000.

It’s important to factor in the additional cost of SDLT when budgeting for a purchase. It is possible for some buyers to add it to their mortgage but the factors to consider here are the interest payments on that additional sum over the long term, and whether it affects the mortgage rate due to the increased loan-to-value ratio. Your lender will be able to advise further on this.

To discuss your home moving options or to find a property at the right price for you, get in touch – we’ll be happy to help.