If you’re planning to buy a property in 2025, you may need to rethink your budget. The UK government is making changes to Stamp Duty Land Tax (SDLT), which could significantly impact homebuyers—especially first-time buyers and those purchasing higher-value properties. But what exactly is changing, and how will it affect your move? Let’s break it down.

What Is Stamp Duty?

Stamp Duty Land Tax (SDLT) is a tax that homebuyers in England and Northern Ireland pay when purchasing a property over a certain threshold. The amount varies depending on the purchase price, buyer type (e.g., first-time buyer, homeowner, investor), and whether the property is residential or non-residential.

Currently, homebuyers pay zero Stamp Duty on properties up to £250,000 (or up to £425,000 for first-time buyers). However, this was only a temporary relief introduced in September 2022 and is set to end on March 31, 2025. After that, the previous lower threshold of £125,000 is expected to return—meaning more buyers will have to pay Stamp Duty.

What Changes Are Coming in 2025?

From April 1, 2025, the Stamp Duty thresholds are expected to revert to pre-2022 levels:

• No tax on the first £125,000 (down from £250,000)
• 2% tax on the portion between £125,001 and £250,000
• 5% tax on the portion between £250,001 and £925,000
• 10% tax on the portion between £925,001 and £1.5 million
• 12% tax on anything above £1.5 million

For first-time buyers, the higher threshold of £425,000 will be reduced back to £300,000.

In short, homebuyers will pay more Stamp Duty from April 2025 unless new government policies extend the relief.

How Will This Affect Your Move?

1. First-Time Buyers Will Pay More

If you’re a first-time buyer purchasing a home between £300,000 and £425,000, you’ll no longer benefit from full relief. You may have to pay 5% on the amount above £300,000, which could add thousands to your costs.

2. Higher Costs for Buyers Above £250,000

With the tax-free threshold dropping from £250,000 to £125,000, anyone purchasing a home over £250,000 will see an increase in their Stamp Duty bill.

For example, a £300,000 home will currently cost £2,500 in Stamp Duty, but after April 2025, this will double to £5,000.

3. Property Market Fluctuations

A rush of buyers is expected before the deadline, which could increase demand and push prices up. After April 2025, we may see a slowdown as affordability decreases.

4. Investors and Second-Home Buyers Hit Harder

Buy-to-let investors and those purchasing second homes already pay a 3% surcharge on top of standard rates. With the changes, property investment costs will rise even further, potentially cooling the rental market.

Should You Buy Before the Change?

If you’re considering a move, purchasing before April 2025 could save you thousands in Stamp Duty. However, rushing a purchase just to beat the deadline may not be the best financial move. Here’s what to consider:

✅ If you’re close to buying: Locking in today’s lower rates could be beneficial.
✅ If you’re still saving: Consider the full cost impact post-2025.
✅ If you’re an investor: Factor in potential rental yield changes and market trends.

Final Thoughts

The 2025 Stamp Duty changes will make buying a home more expensive for many. If you’re planning to move, it’s worth speaking to a mortgage adviser or conveyancer to understand how these changes will affect your budget.

With a potential rush of buyers before April 2025, acting early could help you secure a better deal—but only if it makes sense for your finances.

Thinking of buying before the deadline? Now might be the time to start your search.