Updated Dec 2024
What is Stamp Duty and how is it changing?
Stamp Duty is a tax paid by the buyer of a property upon completion. The amount you pay can depend on several factors, including the value of the property, and whether you’re a first-time buyer, buying a second home, or just moving to a different address.
In the Autumn Budget 2024, the UK government announced changes to Stamp Duty that will come into effect on 1st April 2025. They apply to all property purchases that complete on or after that date, even if they were agreed beforehand.
In this article, we’ll break down the changes and how they could affect you. For a full guide on Stamp Duty changes, make sure to check the full government guidelines here.
Stamp Duty rates for main residences
Stamp Duty rates for main residences are changing. These new rules apply to everyone who has previously owned their own home, either in the UK or abroad. In this article, we refer to these people as “returning buyers”.
| Proportion of property value | Current Rate (Until 31st March 2025) |
New Rate (From 1st April 2025) |
|---|---|---|
| Zero to £125,001 | 0% | 0% |
| £125,001 to £250,000 | 0% | 2% |
| £250,001 to £925,000 | 5% | 5% |
| £925,001 to £1.5 million | 10% | 10% |
| Over £1.5 million | 12% | 12% |
Until 31st March 2025, home movers can purchase a property worth up to £250,000 without paying any Stamp Duty. With the incoming changes, this drops to £125,000.
With the changes, home movers will pay 2% Stamp Duty on the portion of the property price between £125,001 and £250,000. Stamp Duty on the portion of the property price above £250,000 has not changed.
That means if you’re buying a property over £125,000 you’ll pay extra Stamp Duty from April 2025. As buying a home is a big financial commitment, it’s important to factor in the changing Stamp Duty costs when budgeting for your purchase.
Example Main Residence - £350,000
Before April 2025
In March 2025 you buy a house for £350,000. The Stamp Duty you owe will be calculated as follows:
- 0% on the first £125,000 = £0
- 0% on the second £125,000 = £0
- 5% on the final £100,000 = £5,000
April 2025
In April 2025 you buy a house for £350,000. The Stamp Duty you owe will be calculated as follows:
- 0% on the first £125,000 = £0
- 2% on the second £125,000 = £2,500
- 5% on the final £100,000 = £5,000
Stamp Duty rates for first-time buyers
In the UK, you’re considered a first-time buyer if you’ve never owned a property before, whether that’s in the UK or anywhere else in the world. From April 2025, you’re only eligible for the reduced rates shown below if you and the other people you’re buying with are all first-time buyers, and the property price is £500,000 or less. This is down from £625,000, which was the previous threshold, available until 31st March 2025.
| Proportion of property value | Current Rate (Until 31st March 2025) |
New Rate (From 1st April 2025) |
|---|---|---|
| Up to £300,000 | 0% | 0% |
| £300,001 to £425,000 | 0% | 5% |
| £425,001 to £500,000 | 5% | 5% |
| £500,001 to £625,000 | 5% | Not eligible for first-time buyer relief |
Before April 2025, first-time buyers could purchase a property worth up to £425,000 without paying any Stamp Duty. With the incoming changes, this drops to £300,000.
From April 2025, first-time buyers will pay 5% Stamp Duty on the portion of the property price between £300,001 and £425,000. For properties costing more than £500,000, first-time buyers will pay the standard rates of Stamp Duty that apply to all buyers.
Example First Time Buyer - £350,000
Before April 2025
In March 2025 you buy a house for £350,000. The Stamp Duty you owe will be calculated as follows:
- 0% on the first £300,000 = £0
- 0% on the final £50,000 = £0
April 2025
In April 2025 you buy a house for £350,000. The Stamp Duty you owe will be calculated as follows:
- 0% on the first £300,000 = £0
- 5% on the final £50,000 = £2,500
Stamp Duty rates for additional properties
Stamp Duty rates for additional properties are changing too. These new rules apply to everyone who is buying a second home, including landlords and buy-to-let investors.
| Proportion of property value | Current Rate (Until 31st March 2025) |
New Rate (From 1st April 2025) |
|---|---|---|
| Up to £125,000 | 5% | 5% |
| £125,001 to £250,000 | 5% | 7% |
| £250,001 to £925,000 | 10% | 10% |
| £925,001 to £1.5 million | 15% | 15% |
| Over £1.5 million | 17% | 17% |
Until 31st March 2025, additional property buyers would pay 5% stamp duty on a property worth up to £250,000. With the incoming changes, stamp duty on the portion of the property price between £125,001 and £250,000 increases to 7%.
Buyers will now pay 7% Stamp Duty on the portion of the property price between £125,001 and £250,000. Above this price point, Stamp Duty on the portion of the property price remain unchanged.
Example Additional Property - £600,000
Before April 2025
In March 2025 you buy a second home for £600,000. The Stamp Duty you owe will be calculated as follows:
- 5% on the first £125,000 = £6,250
- 5% on the next £125,000 = £6,250
- 10% on the remaining £350,000 = £35,000
April 2025
In April 2025 you buy a second home for £600,000. The Stamp Duty you owe will be calculated as follows:
- 5% on the first £125,000 = £6,250
- 7% on the next £125,000 = £8,750
- 10% on the remaining £350,000 = £35,000
Time is of the essence
Industry figures show that buying a freehold property in the UK takes 21 weeks on average. However, Juno completes transactions in just 12 weeks. So you need to get an offer accepted very soon if you want to stand a chance of saving the difference, but even then nothing is guaranteed. Click here to get a quote and find out how much you could save.
This article is for informational purposes only and does not constitute legal or tax advice. Please consult with a qualified legal or tax professional for advice specific to your circumstances.