Stamp Duty Changes Are Coming
From 1 April 2025, new stamp duty land tax (SDLT) thresholds will mean that many buyers —especially first-time buyers — could pay higher SDLT rates on property purchases.
First-time buyers purchasing a property from 1 April will pay SDLT at 5% on the purchase price above £300,000. Currently, the purchase price has to be above £425,000 for SDLT to kick in for first-time buyers, so the change is likely to result in many more property purchases becoming subject to SDLT.
The maximum property value eligible for first-time buyer relief will also decrease from £625,000 to £500,000. This means that if the purchase price is over £500,000, the relief will not be available and the standard rates of SDLT will apply.
Another change from 1 April is that the 0% SDLT rate band on standard residential purchases will drop from £250,000 to £125,000, again bringing more property purchases into the SDLT regime.
So, if you’re a first-time buyer purchasing a property for £600,000 after 1 April 2025, the SDLT would be calculated as follows:
First £125,000: 0% SDLT = £0
Next £125,000 (£125,001 to £250,000): 2% SDLT = £2,500
Remaining £350,000 (£250,001 to £600,000): 5% SDLT = £17,500
Total SDLT payable: £20,000
This calculation reflects the standard SDLT rates applicable to all buyers for properties over £500,000, as first-time buyer relief does not apply in this scenario.
These changes will mean a significant shift in the property market, especially for those trying to get onto the ladder. With reduced reliefs and lower thresholds, home ownership will feel further out of reach for many.
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