Stamp duty is changing in 2025: the impact on your property purchase

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 the current stamp duty rates in our guide.

Starting on the 1st of April 2025, significant Stamp Duty changes will take effect:

• The nil-rate threshold will drop from £250,000 to £125,000.
• For first-time buyers, the nil-rate threshold will reduce from £425,000 to £300,000.
• The maximum property price eligible for First-Time Buyers Relief will decrease from £625,000 to £500,000.

The current stamp duty rates for primary properties are:

From the 1st of April 2025, the stamp duty rates for primary properties will be updated as follow:

The stamp duty changes will have a big impact on first time buyers.

First-time buyers will pay no stamp duty on properties up to £300,000 (instead of £425,000 currently).

The first time buyer relief threshold will also be lowered to £500,000 (instead of £625,00 currently).

From the 1st of April 2025, the stamp duty rates for first time buyers will be as follow:

The current stamp duty rates for primary properties are:

From the 1st of April 2025, the stamp duty rates for secondary property will be as follow:

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 .