How Will The 2025 Stamp Duty Changes Affect Home Buyers?

From 1^st April 2025, anyone buying a residential property with a value of over £125,000 will need to pay stamp duty. Under the current rules, stamp duty only applies from £250,000. This marks a substantial change in stamp duty policy in England and Northern Ireland, potentially reducing the affordability of housing for home buyers. In this article, we will explain all you need to know about how the 2025 Stamp Duty changes will affect home buyers in England and Northern Ireland, including those buying a first or subsequent property.

How will main residence stamp duty change in April 2025?

If you are planning to buy a property in the UK in 2025 (assuming it is not your first home), the Stamp Duty thresholds are changing from the following:

To the following from 1^st April 2025:

How will stamp duty change in 2025 for first-time buyers?

If you are planning to purchase your first home in 2025, you may be eligible for a discount on the amount of stamp duty you need to pay. Under the current rules, there is no stamp duty on property purchases of up to £425,000, while 5% is payable over this amount. The rules also state that if you are a first-time buyer and the value of the property is over £625,000, you are not eligible for stamp duty relief.

Under the new stamp duty rules that will come into force on 1^st April 2025, the following discounted rates will apply for first-time buyers:

• No stamp duty is payable on residential property purchases up to £300,000 (reduced from £425,000), and
• 5% stamp duty will be payable on any amount from £300,001 to £500,000

In addition, the rules now state that first-time buyer stamp duty relief is no longer available for purchases of over £500,000.

How will stamp duty change in 2025 for those buying additional properties?

For those planning to buy a second or subsequent home (i.e. that is not their main residence), the following stamp duty changes will apply from 1^st April 2025:

As such, additional residential property buyers will now be expected to pay a 2% higher stamp duty on the portion between £ £125,001 to £250,000, however, the rates above this threshold will remain the same. This change will likely be an increasingly determining factor when purchasers decide whether to buy investment properties.

What can home buyers do to avoid the stamp duty increases in 2025?

The stamp duty rates and thresholds that apply to your purchase in 2025 will depend on whether you complete before or after 1^st April 2025. Given that the average home purchase takes up to 12 weeks, it is imperative to act quickly to get the conveyancing underway if you have found a home to buy. Your conveyancer will understand the importance of reaching the point of completion before the end of March 2025, and they should be able to give you a realistic idea of whether this is possible. This may be more difficult to estimate if you are in a chain of transactions. If you instruct our conveyancing services, we will do all we can to complete all of the paperwork and searches in a timely manner. We will also communicate with the seller’s conveyancer to ensure that all aspects are progressing towards your target date.

If you are unlikely to meet the 1^st April 2025 deadline for completion, it may be possible to negotiate a discounted purchase price with the seller to soften the blow. Your conveyancer will be able to explain your options and negotiate on your behalf.

Final words

Having worked so hard to have a deposit, knowing that you may need to pay hundreds or even thousands of pounds more to purchase your home may cause you considerable worry. The good news is that by instructing an experienced conveyancer, you can beat the stamp duty changes. Pearce Legal is accredited by the Law Society for conveyancing quality, meaning that you can be confident we have the systems and processes in place to complete your transaction as quickly as possible but in a manner that ensures your legal protection. After all, you are most likely to be making the most important purchase of your life, so you want to know that all of the legal aspects of the transaction have been identified and dealt with.

Pearcelegal has a dedicated team of conveyancing law solicitors who provide practical legal advice and support on all matters related to residential home purchases in the UK. To make an appointment, please contact us on 0121 270 2700 or enquire through our contact form.