From April 2025, significant changes to Stamp Duty Land Tax (SDLT) have come into effect, impacting homebuyers across England and Northern Ireland. These adjustments mark the end of temporary measures introduced in September 2022, which had aimed to ease the financial burden on property buyers. Here’s a breakdown of what these changes mean for you.
By Mark Duddridge – Senior Tax Manager
What is Stamp Duty Land Tax?
Stamp Duty Land Tax is a tax paid by property buyers in England and Northern Ireland when purchasing land or property above a certain price. The amount of SDLT owed depends on the property’s value and the buyer’s circumstances, such as whether they are a first-time buyer or purchasing an additional property. For property in Wales there is a separate set of rates for Land Transactions Tax and for purchases in Scotland Land and Buildings Transaction Tax applies.
Key Changes to SDLT from April 2025
Lower Nil-Rate Thresholds:
- For existing homeowners, the nil-rate threshold has reverted to £125,000, down from the temporary level of £250,000. This means buyers now pay SDLT on properties priced above £125,000.
- First-time buyers now benefit from a nil-rate threshold of £300,000, reduced from the previous £425,000, on purchases up to £500,000. Purchases above this amount will incur SDLT at the normal rates.
Impact on First-Time Buyers:
- First-time buyers purchasing a property worth £500,000 will now pay £10,000 in SDLT, compared to £3,750 under the previous rates.
Higher Costs for Additional Properties:
- Buyers of second homes or buy-to-let properties face increased SDLT rates, with a surcharge of 5% on top of standard rates.
Why Have These Changes Been Introduced?
The government has reverted to pre-2022 SDLT thresholds to address housing market challenges and generate additional revenue. While these changes aim to stabilise the market, they also increase upfront costs for buyers, particularly first-time buyers and those purchasing in high-value areas like London.
How Will This Affect Homebuyers?
- Increased Upfront Costs: Buyers will need to budget for higher SDLT payments, which could impact affordability.
- Market Dynamics: The changes may discourage some buyers, potentially slowing down the housing market in the short term.
Planning Your Next Move
If you’re considering buying a property, it’s essential to factor in the new SDLT rates. Use the HMRC SDLT calculator to estimate your tax liability and plan your finances accordingly.
Consulting with a conveyancer or financial advisor can also help you understand these changes effectively.
The SDLT adjustments highlight the importance of staying informed about tax policies and their implications. Whether you’re a first-time buyer or a seasoned investor, understanding these changes can help you make informed decisions in the property market.
If you need help with your SDLT, do get in touch.
