Published 13 January 2025 · Last reviewed 1 May 2026
It’s going to be a hectic start to 2025 for the “Mortgage World” as buyers scramble to purchase properties before the changes in England, brought about by Chancellor Rachel Reeves, come in 1st April on Stamp Duty Land Tax (SDLT).
From my own observations, many Solicitors are already under pressure due to the Right-to-Buy discount deadline, also brought about by Labour’s: “new broom”, and it’s likely to be a legal part of the property buying process that is going to be under the most strain with these negative SDLT changes.
Below, we outline these adjustments for prospective buyers to help them understand the new rates and thresholds:
Current SDLT Rates and Upcoming Stamp Duty Changes
Under the current system, SDLT rates for main residences are as follows:
- £1 to £250,000: 0%
- £250,001 to £925,000: 5%
- £925,001 to £1,500,000: 10%
- Over £1,500,000: 12%
Stamp Duty Changes From 1st April 2025, these rates will change to:
- £1 to £125,000: 0%
- £125,001 to £250,000: 2%
- £250,001 to £925,000: 5%
- £925,001 to £1,500,000: 10%
- Over £1,500,000: 12%
This means that properties purchased between £125,001 and £250,000 will incur a 2% tax, introducing an additional cost for many buyers, and also placing time pressures on the onward chain.
Impact on First-Time Buyers about the Stamp Duty Changes
The relief for First time buyers who currently benefit from a higher SDLT threshold with no tax payable on properties up to £425,000, is also set to change as follows:
- £1 to £300,000: 0%
- £300,001 to £500,000: 5%
Additionally, the cap on the maximum property price eligible for first-time buyer relief will decrease from £625,000 to £500,000.
Implications for Additional Property Purchases
For those purchasing additional properties such as second homes and buy-to-lets, the SDLT rates will be:
- £1 to £125,000: 5%
- £125,001 to £250,000: 7%
- £250,001 to £925,000: 10%
- £925,001 to £1,500,000: 15%
- Over £1,500,000: 17%
Notably, the rate for properties between £125,001 and £250,000 will increase from 5% to 7%, increasing consideration for buyers in this price bracket.
What does the Stamp Duty Changes mean for the property market 2025?
Well, in the Mortgage arena, the planned SDLT increase will certainly get things racing for the first quarter, but it looks destined to be a detractor thereafter. To put this into context first time buyers (FTB) are the live-blood of the market and for example, a FTB purchasing a property for £400,000 will face an SDLT charge of £5,000 from 1st April 2025, compared to no tax under the current system. Landlords have already struggled to make their investment sums work with the high interest rates. So, there’s no denying it’s a blow!
However, there is hope that the long-awaited rate reductions will manifest later in the year, which should reignite the property market and bring things back on the front foot.
Importantly, if you are starting out to buy now or in the middle of the process I urge you to be responsive to your Mortgage Brokers or Lenders requests. Once the Mortgage offer is with your Solicitors, aim to call them at least once a week as there will almost certainly be financial implications if the SDLT deadline is not met, if not for you directly, then for those in the chain.
We are Mortgage Brokers and this article is intended for general guidance and should not be considered as financial advice. Homebuyers are encouraged to consult with a suitably qualified Tax adviser to understand how these changes specifically impact their individual circumstances.
For article source of information, visit the Government Website