If you are planning a property purchase, it is important to factor in the additional cost of stamp duty. After March 2025, the amount you pay in this tax could also significantly increase, as Rachel Reeves announced the rates will soon be changing. Here is what you need to know…
Stamp Duty Land Tax (SDLT), usually referred to as stamp duty, is a tax you must pay to the government when buying property in England or Northern Ireland. The amount you pay is calculated as a percentage of the property price and can add a significant cost when moving home or buying an additional property.
At the time of writing (before 31st March 2025) the rates are as follows:
Stamp duty rates up to 31st March 2025 for a single property (you will usually pay an additional 5% for second property)
| Property value | Stamp duty rate |
| Up to £250,000 | 0% |
| The next £675,000 (the portion from £250,001 to £925,000) | 5% |
| The next £575,000 (the portion from £925,001 to £1.5 million) | 10% |
| The remaining amount (the portion above £1.5 million) | 12% |
Example:
In February 2025, you buy a house for £300,000. The amount of stamp duty you have to pay is worked out using the above thresholds:
0% on the first £250,000 = £0
5% on the remaining £50,000 = £2,500
Total stamp duty to pay = £2,500
After 31st March 2025, stamp duty rates will increase and you will pay more tax on your property purchase. If you have not yet begun a property transaction, it is now too late to complete before the new stamp duty rates take effect.
Stamp duty rates from 1st April 2025
| Property value | Stamp duty rate |
| Up to £125,000 | 0% |
| The next £125,000 (the portion from £125,001 to £250,000) | 2% |
| The next £675,000 (the portion from £250,001 to £925,000) | 5% |
| The next £575,000 (the portion from £925,001 to £1.5 million) | 10% |
| The remaining amount (the portion above £1.5 million) | 12% |
Example:
In May 2025, you buy a house for £300,000. The amount of stamp duty you have to pay is worked out using the new thresholds above:
0% on the first £125,000 = £0
2% on the next £125,000 = £2,500
5% on the remaining £50,000 = £2,500
Total stamp duty to pay = £5,000
To help first time buyers get onto the property ladder, some tax relief is available, making a house purchase more affordable. You are only eligible for the reduced stamp duty rates if you and everyone else you are buying with are first-time buyers.
After March 2025, some relief will still be available, but the amount at which you begin paying tax is coming down and the maximum property price eligible for relief is also reducing. This means more first-time buyers will face higher stamp duty bills.
First time buyer stamp duty rates up to 31st March 2025
| Property value | Stamp duty rate |
| Up to £425,000 | 0% |
| The next £200,000 (the portion from £425,001 to £625,000) | 5% |
| If the property is over £625,000 | No relief given – normal rates apply |
First time buyer stamp duty rates up to 31st March 2025
| Property value | Stamp duty rate |
| Up to £300,000 | 0% |
| The next £200,000 (the portion from £300,001 to £500,000) | 5% |
| If the property is over £500,000 | No relief given – normal rates apply |
If you are buying a residential property in addition to the one in which you live e.g. a second home, you will usually have to pay an additional 5% stamp duty on top of the usual rates. That is true both before and after the tax changes. However, you shouldn’t have to pay the higher rates if you are replacing your main residence.
We have put together a table to show how much stamp duty different types of buyers would pay before and after the change in rates:
| Buyer before 31st March (no other property owned) | Buyer after 31st March (no other property owned) | First time buyer before 31st March | First time buyer after 31st March | Buyer before 31st March (at least one other property owned) | Buyer after 31st March (at least one other property owned) | |
| Stamp duty payable for a £500,000 house | 0% on the first £250,000 = £0 5% on the remaining £250,000 = £12,500 Total SDLT = £12,500 | 0% on the first £125,000 = £0 2% on the next £125,000 = £500 5% on the remaining £250,000 = £12,500 Total SDLT = £13,000 | 0% on the first £425,000 = £0 5% on the remaining £75,000 = £3,750 Total SDLT = £3,750
| 0% on the first £300,000 = £0 5% on the remaining £200,000 = £10,000 Total SDLT = £10,000
| 5% on the first £250,000 = £12,500 10% on the remaining £250,000 = £25,000 Total SDLT = £37,500 | 5% on the first £125,000 = £6,250 7% on next £125,000 = £8,750 10% on the remaining £250,000 = £25,000 Total SDLT = £40,000 |
| Stamp duty payable for a £625,000 house | 0% on the first £250,000 = £0 5% on the remaining £375,000 = £18,750 Total SDLT = £18,750 | 0% on the first £125,000 = £0 2% on the next £125,000 = £500 5% on the remaining £375,000 = £18,750 Total SDLT = £19,250
| 0% on the first £425,000 = £0 5% on the remaining £200,000 = £10,000 Total SDLT = £10,000 | Price above £500,000: no relief given and normal rates apply. 0% on the first £125,000 = £0 2% on the next £125,000 = £500 5% on the remaining £375,000 = £18,750 Total SDLT = £19,250
| 5% on the first £250,000 = £12,500 10% on the remaining £375,000= £37,500 Total SDLT = £50,000 | 5% on the first £125,000 = £6,250 7% on next £125,000 = £8,750 10% on the remaining £375,000 = £37,500 Total SDLT = £52,500
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It is essential to factor in the additional cost of stamp duty and other moving expenses when buying property, and to take the new rates into consideration. Calculating how much stamp duty you would pay on a house is useful for budgeting and assessing affordability as you house hunt.
If you are planning a property purchase, we are here to help. At Charters, we have years of experience helping clients and are happy to answer all your questions. Please get in touch with the team today.
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