Stamp Duty in 2025: What homebuyers need to know before the rates rise
Buying a home is one of the biggest financial commitments most people make in their lifetime. On top of the property price, various costs and taxes come into play, one of the most significant being Stamp Duty Land Tax (SDLT). If you’re planning to purchase a property in England or Northern Ireland, you need to be aware of upcoming changes to SDLT that will take effect from 1 April 2025.
Understanding stamp duty, who pays it, when it’s due, and how the changes will impact you could save you thousands of pounds. Read on to find out what the new rates mean and how you can avoid paying more by completing your property transaction before the deadline.
What is Stamp Duty and Who Pays It?
Stamp Duty Land Tax (SDLT) is a tax imposed by the UK government on property transactions over a certain value. It applies to residential and commercial properties, with rates differing depending on whether you’re a first-time buyer, a homeowner moving up the property ladder, or an investor purchasing a second home.
Who pays Stamp Duty?
- Homebuyers: Anyone purchasing a property over the threshold must pay SDLT.
- Investors & Landlords: Buyers of second homes or buy-to-let properties typically pay a higher rate.
- Businesses: Those acquiring commercial properties are also subject to SDLT.
When Do You Have to Pay Stamp Duty?
Stamp duty is payable to HM Revenue & Customs (HMRC) within 14 days of completing your property purchase. If you fail to pay within this timeframe, you may face penalties or interest charges. Usually, your solicitor or conveyancer handles the payment on your behalf, ensuring everything is completed correctly and on time.
Current SDLT Rates (Until 31 March 2025)
For standard home purchases:
- Up to £250,000 – 0%
- £250,001 to £925,000 – 5%
- £925,001 to £1.5 million – 10%
- Above £1.5 million – 12%
For first-time buyers:
- Up to £425,000 – 0%
- £425,001 to £625,000 – 5%
- Over £625,000 – Standard rates apply
New SDLT Rates (From 1 April 2025)
For standard home purchases:
- Up to £125,000 – 0%
- £125,001 to £250,000 – 2%
- £250,001 to £925,000 – 5%
- £925,001 to £1.5 million – 10%
- Over £1.5 million – 12%
For first-time buyers:
- Up to £300,000 – 0%
- £300,001 to £500,000 – 5%
- Over £500,000 – Standard rates apply
What Do These Changes Mean for Buyers?
The increase in SDLT rates means that homebuyers will pay more tax on their property purchases from April 2025 onwards. Here are some examples to illustrate the difference:
Example 1: Standard Buyer Purchasing a £350,000 Property
Before 1 April 2025:
- 0% on the first £250,000 = £0
- 5% on the next £100,000 = £5,000
- Total SDLT: £5,000
After 1 April 2025:
- 0% on the first £125,000 = £0
- 2% on the next £125,000 = £2,500
- 5% on the next £100,000 = £5,000
- Total SDLT: £7,500
Increase in SDLT: £2,500
Example 2: First-Time Buyer Purchasing a £400,000 Property
Before 1 April 2025:
- 0% on the first £425,000 = £0
- Total SDLT: £0
After 1 April 2025:
- 0% on the first £300,000 = £0
- 5% on the remaining £100,000 = £5,000
- Total SDLT: £5,000
Increase in SDLT: £5,000
How Versus Law Solicitors Can Help You Save Money
With these upcoming changes, acting before 1 April 2025 can save you thousands of pounds in SDLT. At Versus Law Solicitors, our experienced conveyancing team can help you complete your property transaction quickly and efficiently, ensuring you pay the lower stamp duty rates while they are still in effect.
Secure Your Property Before the Rates Rise
If you’re planning to buy a home, now is the time to act. Contact Versus Law Solicitors today to get expert advice and fast-track your property purchase before the stamp duty changes come into effect. Call us on 0161 249 5087 or get a free conveyancing quote through our online calculator.
Avoid paying more tax – let us help you complete your property transaction before the new SDLT rates take effect!