Autumn budget 2024: Stamp duty for second homes increases

In the latest UK Budget, Chancellor Rachel Reeves announced a new policy to raise stamp duty on second homes, increasing it from 3% to 5% for properties up to £250,000. A 2% increase will also be applied to all the other thresholds.

The measure aims to ease the market for first-time buyers and reduce competition from investors and buy-to-let purchasers.

This rise will also apply to buy-to-let buyers and companies purchasing residential property. In the Budget, the Chancellor affirmed continued support for first-time buyers, who still receive full stamp duty relief on homes up to £425,000, a threshold expected to reduce to £300,000 next year.

Stamp duty is a tax applied to the purchase of homes, flats, and other land in the UK, calculated in progressive bands.

For a first home valued up to £250,000, no stamp duty is owed. For properties priced from £250,001 to £925,000, buyers pay 0% on the first £250,000 and 5% on the amount above that.

For example, on a £295,000 home, the buyer would pay 5% on the first £250,000 and 5% on the final £45,000, resulting in a stamp duty of £2,250.

Learn more about how much stamp duty will cost you in our guide.

For second homes, stamp duty now has higher rates and is as follow:

First-time buyers pay no stamp duty on properties up to £425,000, though this threshold will reduce to £300,000 next year.

For homes priced up to £625,000, they pay no tax on the first £425,000 and 5% on the remaining amount up to £200,000. For higher-value homes, standard rates apply without relief.

The stamp duty hike on additional homes is expected to boost market accessibility for first-time buyers, with the government projecting 130,000 more primary home transactions in the coming five years.

However, uncertainty looms over the threshold reduction for first-time buyers next year, with industry experts and estate agents, including Rightmove, urging an extension of the current higher threshold to support market stability.

Property experts have responded positively to the announcement, highlighting how past stamp duty reductions helped young buyers enter the market without heavy cash burdens for upfront fees.

Many anticipate that maintaining support for first-time buyers will continue to stimulate growth and balance the property market amid rising costs.

If you have any more questions about stamp duty rates, when it must be paid or anything else, our friendly team is happy to help you; call us on .