News & Insights

From March 2025, changes introduced in Rachel Reeves’ Budget, mean more people will be paying tax when they would not have done previously.

What is Stamp Duty?

Stamp Duty Land Tax, often referred to simply as Stamp Duty or SDLT, is a tax payable to HM Revenue & Customs on the purchase of a property. It needs to be paid within fourteen days of completion of the purchase. The amount payable is based on the value of the property as well as whether you are a first-time buyer and whether you are buying your main home or a second or subsequent property.

If Stamp Duty is not paid on time, you will be liable to pay a penalty. Your solicitor will generally deal with the payment on your behalf as soon as your purchase has been completed.

How much is Stamp Duty?

At the moment, buyers of homes worth less than £250,000 don’t pay any stamp duty (nil rate threshold). The nil rate threshold is £425,000 for those buying their first property. The maximum purchase price for which first time buyers relief (reduce stamp duty rate) is applied to purchases of first homes is £650,000.

From 31^st March 2025 onwards, these thresholds will be lowered to their previous levels, falling from £250,000 to £125,000 for buyers who have purchased a home before, from £425,000 to £300,000 for first-time buyers and from £625,000 to £500,000 for first time buyers relief.

CURRENT rates (for main residencies in England):

REVISED rates (effective from 31^st March 2025):

 Stamp Duty rates for second and subsequent properties

The new budget has also introduced an increase in stamp duty on second homes and buy-to-let properties. These changes have already taken effect from 31 October 2024, and property buyers will need to consider these updates as they plan their transactions.

This means that the new rate of Stamp Duty payable on a second or subsequent property is:

 What is the impact for first time buyers?

As stated above, to help first time buyers purchase a home, currently no Stamp Duty is payable on the first £425,000 of the purchase price, which will be reduce to £300,000 in March 2025.

In addition, where the price is between £425,000 and £625,000, a reduced Stamp Duty of 5% is payable on the part of the price in that bracket due to first-time buyers relief on the property. As of the 31^st March, 2025, the bracket reduces to between £300,000 and £500,000.

CURRENT Stamp Duty rates for first time buyers are:

 FROM 31^ST MARCH 2025 Stamp Duty rates for first time buyers are:

To be classed as a first time buyer, you cannot have owned any property previously, either in the UK or overseas. If you are buying jointly with someone else, they must also be a first time buyer.

What does this mean in practical terms?

If you are a first time buyer buying a property costing £380,000, Stamp Duty will be calculated as follows:

Currently:

0% as it is below the nil-rate threshold of £425,000

After 31^st March 2025:

0% on the initial £300,000

5% on the additional £80,000

Total Stamp Duty payable: £ 4,000

To save yourself paying additional stamp duty rates, you need to have completed your property purchase before 31st March 2025.

Whilst this date may seem a long way off, the average time to complete a house sale, especially if it is leasehold, is taking longer than the average 12 weeks. We would recommend you contact your solicitor and estate agent to check timescales.

Contact us

If you would like to speak to any of our property team about Stamp Duty, or any other queries relating to buying or selling a residential property, please contact Kelly Howe on k.howe@laceyssolicitors.co.uk or 01202 377800.