What do the Stamp Duty Land Tax changes mean for you

The upcoming adjustments to Stamp Duty Land Tax in April 2025 could see buyers facing thousands of pounds in additional costs. Purchases finalised after March 31, 2025, will be subject to the updated regulations, resulting in increased payments for many.

What is Stamp Duty?

• Stamp Duty Land Tax (SDLT) is a mandatory tax that is applied when purchasing a property or land in England and Northern Ireland
• Land Transaction Tax (LTT) is a mandatory tax applied when purchasing a property or land in Wales

To provide certainty to taxpayers, Land Transaction Tax (LTT) rates and bands are currently being kept under review with no changes proposed. 

What will first-time buyers pay in stamp duty?

First-time buyers in England and Northern Ireland are currently exempt from paying stamp duty on properties priced up to £425,000. Starting April 1, 2025, homes priced between £300,001 and £500,000 will attract a 5% stamp duty charge.

Example:

• Property price: £350,000
• Stamp Duty now: £0
• Stamp Duty after April 1, 2025: £2,500

The tax is calculated on the £50,000 exceeding £300,001, with a 5% rate applied to this portion.

In Wales, there are no first-time buyer reliefs or exemptions for Land Transaction Tax (LTT), regardless of the property’s purpose. Still, many first-time buyer properties fall within the £225,000 tax-free threshold.

LTT rates in Wales are as follows:

• 0% on the first £225,000.
• 6% on £225,001–£400,000.
• 7.5% on £400,001–£750,000.
• 10% on £750,001–£1.5 million.
• 12% on any amount above £1.5 million.

Example:

• Purchase price: £350,000
• LTT paid: £7,500

A 6% tax applies to the £125,000 between £225,000 and £350,000, totaling £7,500.

Changes to Stamp Duty: How They Affect Home Buyers and Sellers

Currently, home buyers moving to a new property don’t pay stamp duty on homes priced up to £250,000. But from April 1, 2025, a 2% rate will be charged on the portion between £125,001 and £250,000.

Example:

• Property Price: £350,000
• Today’s Stamp Duty: £5,000
• April 2025 Onward: £7,500

This change means 2% applies to £125,001–£250,000 (£2,500), and 5% applies to £250,001–£925,000 (£5,000), totaling £7,500.

For Welsh buyers, no tax is due on the first £225,000. The rates are 6% for £225,001–£400,000, 7.5% for £400,001–£750,000, 10% for £750,001–£1.5 million, and 12% for amounts above £1.5 million.

Example:

• Property Value: £350,000
• Welsh Stamp Duty (LTT): £7,500

A 6% tax is applied to the range £225,001–£400,000, equating to £7,500.

How do these changes affect those with more than one property?
As of now, property investors and owners of multiple homes pay a 5% stamp duty rate on properties valued between £0 and £250,000. Starting April 1, 2025, this rate will only apply to the first £125,000 of the property value.

Example:

• Property value: £350,000
• Current stamp duty: £5,000
• New stamp duty from April 2025: £25,000

Under the updated rules, the first £125,000 will be taxed at 5% (£6,250), the next £125,000 at 7% (£8,750), and amounts above £250,000 at 10% (£10,000). This brings the total to £25,000.

For Wales, where Land Transaction Tax (LTT) is being reviewed, current rates for owners of multiple properties include: 4% on the first £180,000, 7.5% on £180,001 to £250,000, 9% on £250,001 to £400,000, 11.5% on £400,001 to £750,000, 14% on £750,001 to £1,500,000, and 16% for amounts above £1,500,000.

Example:

• Property value: £350,000
• Current LTT for investors: £21,450

This includes 4% on £180,000 (£7,200), 7.5% on £70,000 (£5,250), and 9% on £100,000 (£9,000).

To avoid these higher costs, complete your purchase by March 31, 2025. Contact our team today for a free property valuation and personalised guidance on your next steps.