From the 1st April 2025 there are changes to the rates relating to Stamp Duty Land Tax (SDLT).
What are the Key Changes Coming into Effect 1 April 2025?
The threshold will change for property completions that take place after 31st March 2025. These changes will affect both first-time buyers and those purchasing additional properties.
Here are a few key points to consider.
Reduction of the Nil-Rate Band
Starting April 1, 2025, the nil-rate band for Stamp Duty Land Tax (SDLT) will decrease from £250,000 to £125,000. Consequently, buyers will be required to pay SDLT on any property purchase that exceeds £125,000.
Here’s the SDLT rates that you need to know from 1 April 2025:
- Up to £125,000 = 0% SDLT rate
- £125,001 to £250,000 = 2% SDLT rate
- £250,001 to £925,000 = 5% SDLT rate
- £925,001 to £1.5 million = 10% SDLT rate
- Above £1.5 million = 12% SDLT rate
The impact on First-Time Buyers
Reductions in the scope of first-time buyer’s relief could result in an extra charge of up to £6,250 in Stamp Duty Land Tax (SDLT) for residential properties purchased for more than £300,000. This adjustment aligns with the regulations that were in effect prior to September 23, 2022.
- first time buyer’s relief will only be available where the purchase price of the property does not exceed £500k (down from the current cap of £625k)
- the current £425k nil rate band first-time buyer’s relief threshold will fall back to £300k (with the difference being chargeable to SDLT at 5%).
- In addition, from 1 April 2025, additional SDLT of up to £11.25k will become payable where first-time buyer’s relief can no longer be claimed but could previously (because the purchase price exceeds £500k but not £625k). This is due to the withdrawal of the relief in those circumstances combined with the reduction in the SDLT nil rate banding, as described.
Changes to Additional Property Purchases
Buyers purchasing additional properties will continue to pay a 3% surcharge on top of the standard SDLT rates. Understanding the 2025 stamp duty land tax changes, assessing their financial impact, and implementing strategies to manage increased costs are crucial for property investors. By staying informed and proactive, you can navigate the evolving landscape successfully. If you’re planning on purchasing an additional property in 2025, we recommend that you seek professional legal advice on the SDLT changes.
While we will do everything, we can to help you, please bear in mind that there are factors in the conveyancing process beyond our control, and therefore we cannot guarantee that your transaction will complete before this date. We will not be liable for any additional SDLT payable.
It’s important that buyers budget for higher SDLT payments, as it could affect their overall purchasing power. Additionally, first-time buyers may find it more challenging to enter the property market, particularly in areas with higher property prices.
To assist in understanding their SDLT liabilities, we recommend using the updated SDLT calculator here . This tool will help buyers accurately calculate the amount of SDLT they will need to pay based on the new rates.
To speak to one of our conveyancing solicitors please call us at our Liverpool office on 0151 227 3391 or our Chester office on 01244 311 633 or Make A Free Online Enquiry. Alternatively please email advice@bartletts.co.uk
