What are the Changes to Stamp Duty Land Tax on Residential Property from April 2025?

• Posted onFebruary 26, 2025

Understanding how Stamp Duty Land Tax (SDLT) will affect your purchase of a residential property is essential. Our concise guide covers current rates, upcoming changes, and how they may affect your property transactions.

Stay informed to make well-informed decisions in the property market. Lucy McCallum Board Director and Head of Residental Property shares what you will need to know about the changes.

What is Stamp Duty Land Tax?

SDLT is a tax levied on transactions of land.  This can be payable on residential or commercial land. In this blog, we’ll focus solely on residential transactions.

You may need to pay SDLT when you purchase a property or perhaps if you purchase a share of property, for instance if you and your partner separate and you decide to buy out the other party.

What is changing to the Stamp Duty Land Tax in April 2025?

There is a straightforward online calculator you can use to calculate the amount of SDLT you may be liable for which can be found here. Standard rates of SDLT are changing from 1 April 2025 to pre September 2022 rates, which are set out below:

• You will not pay any SDLT if you are purchasing property with a value of £125,000 or less (currently up to 31 March 2025, you would not pay any SDLT on a purchase with a value of up to £250,000)
• The next £125,000 (the portion from £125,001 to £250,000) will be charged at a rate of 2%.
• The next £675,000 (the portion from £250,001 to £925,000) will be charged at a rate of 5%.
• The next £575,000 (the portion from £925,001 to £1.5 million) will be charged at 10%
• The remaining amount (the portion above £1.5 million) will be charged at a rate of 12%.

The amount of SDLT you are liable for may also depend on your personal circumstances.

If you are purchasing residential property as a second home or investment property or in the name of a company, you will be liable to pay the higher rate of SDLT.

Higher rates of SDLT will be as follows from 1 April 2025:

• If you are purchasing a property with a value of £125,000 or less you will be charged at a rate of 5% of the purchase price (currently up to 31 March 2025, you would pay SDLT on a purchase with a value of up to £250,000 at 5%)
• The next £125,000 (the portion from £125,001 and £250,000) will be charged at 7%
• The next £675,000 (the portion from £250,001 to £925,000) will be charged at a rate of 10%.
• The next £575,000 (the portion from £925,001 to £1.5 million) will be charged at a rate of 15%.
• The remaining amount (the portion above £1.5 million) will be charged at a rate of 17%.

What is changing to the First Time Buyer Relief

If you are a first time buyer, i.e. you, your spouse/civil partner/any minor children have never owned any property or significant share in property anywhere in the world, you could benefit from First Time Buyer Relief.

From 1 April 2025, First time buyers will pay no SDLT on a purchase of property up to £300,000 (down from £425,000 if completing on or before 31 March 2025).

From 1 April 2025 the purchase price cannot exceed £500,000 otherwise the relief will not apply. This is changing from the current limit of £625,000.

Also note that certain criteria must be met to be considered a First Time Buyer:

• The property you are buying must be residential;
• You must be an individual, i.e. not a company;
• Every purchaser must be a first time buyer, meaning, you must not, either alone or jointly with others, have previously owned a residential property (including by way of inheritance or gift);
• You must intend to occupy the property as your only or main residence.

At WSP Solicitors, our experienced team is ready to assist you with all aspects of SDLT, ensuring you understand your obligations and potential liabilities. With offices in Stroud and Gloucester you can contact us today by using the form on the side of this website for email contact@wspsolicitors.com.