It’s no April Fool’s joke – the stamp duty land tax thresholds are indeed changing on 1st April 2025. Stamp duty land tax (SDLT), commonly referred to as stamp duty, is payable by most property purchasers upon completion.

This tax is a key source of revenue for the Government. Generally, things are smooth sailing for HM Revenue & Customs (HMRC) when property values and transaction numbers are high, as seen during the pandemic years. However, a recent report from HMRC revealed that stamp duty receipts have dropped significantly.

According to their figures, stamp duty receipts fell from £15,360 million in the 2022-2023 financial year to £11,615 million in 2023-2024 – a decrease of 24%. This downward trend reflects a property market that is slowing down, with factors such as the cost of living crisis, high inflation, and mortgage rates hovering around 5% dampening the number of sales. Unsurprisingly, the Government has the authority to adjust stamp duty thresholds, which will take place on 1st April 2025.

The period leading up to 31st March 2025 will be crucial for both buyers and sellers who are already in the conveyancing process, while future home movers will need to adjust their expectations to align with the upcoming rates.

With all the changes in property laws, it can be challenging to keep track. To help, I Am The Agent has put together this specific guide to stamp duty:

Keep Conversations Flowing with Conveyancers

If you’re nearing exchange and completion, there’s still time to complete transactions under the current stamp duty thresholds, as the amount of stamp duty is calculated just before completion. Any transactions completing on or after 1st April 2025 will be subject to the new rates.

If you're aiming to meet the 31st March 2025 deadline, communication is vital. While conveyancers bear much of the responsibility, everyone involved in the transaction can help. It’s crucial for the entire chain to understand that the goal is to complete before 1st April 2025, so everyone works towards the same target.

To give your transaction the best chance, ensure that all paperwork is sent, signed, and returned promptly.

Here’s a reminder of the current stamp duty thresholds for previous homeowners purchasing a main residence, which will apply up to 31st March 2025:

Current Stamp Duty Rates (until 31st March 2025)

Know the New Stamp Duty Rates

There’s no denying that property purchases are about to get more expensive. It’s important to consider the future stamp duty rates when buying and selling, so take some time to familiarise yourself with the new thresholds, which will apply from 1st April 2025.

Understanding the upcoming stamp duty rates is not only key for budgeting as a home buyer, but it can also be useful when determining the price at which to list a property. For example, pricing a property just one pound below a threshold could save potential buyers thousands of pounds.

Here are the revised stamp duty rates that will apply from 1st April 2025 for previous homeowners purchasing a main residence:

Stamp Duty Thresholds (from 1st April 2025)

Recognising the Difference for First-Time Buyers

First-time buyers, often regarded as the lifeblood of the property market, are treated somewhat differently when it comes to stamp duty. A more favourable rate currently applies to true homebuying novices – those who have never owned a property before – but this is set to change on 1st April 2025.

First-time buyers will see their current stamp duty discount reduced. At present, first-time buyers only pay stamp duty on the portion of a purchase exceeding £425,000. From 1st April 2025, however, this threshold will decrease to £300,000.

Additionally, a rate of 5% will apply to the portion of a first-time purchase between £300,001 and £500,000. If a first-time buyer purchases a property worth more than £500,000, the first-time buyer discount will no longer apply – a threshold that drops from £625,000 from 1st April 2025.

It’s important to note that first-time buyers purchasing a property under £300,000 – which is above the national average house price according to Nationwide – will still benefit from a stamp duty exemption.

Changes for Second Home Buyers

Those purchasing an additional property, whether a buy-to-let, Airbnb, or holiday home, will find that their purchase becomes more expensive from 1st April 2025. They too will be subject to the revised stamp duty thresholds, as the 2% bracket will be reintroduced.

This increase follows the Government’s decision to raise the additional-property surcharge (an extra tax for those buying another property in addition to their main residence). On 31st October 2024, this surcharge increased from 3% to 5%.

It’s clear that stamp duty changes are on the horizon, and it’s essential to be aware of how these changes will affect your property transactions. Staying informed and planning ahead will help ensure that you’re well-prepared for the adjustments coming in April 2025.