APRIL 2025 – This article has been updated to reflect the rates of stamp duty payable from 1st April 2025.
The Spring Statement on 26th March 2025 revealed that there will be no extension to the stamp duty holiday. So, first time buyer stamp duty relief has now been reduced, and stamp duty for non-first time buyers will go back to its previous higher rates for transactions that complete from the 1st April 2025.
But what does this mean for you if you’re buying your first home, or moving to a new one?
Key takeaways
- The rates for first time buyer stamp duty relief have decreased to the level seen before September 2022. First time buyers must now pay stamp duty if the property costs more than £300,000, down from £425,000.
- First time buyers purchasing a home over £500,000 will also no longer benefit from any first time buyer’s relief. This threshold was previously £625,000.
- Stamp duty rates for home movers have also returned to the higher levels seen before July 2020. Stamp duty must now be paid on the property price from £125,000, down from £250,000.
What is stamp duty?
Stamp Duty Land Tax, more commonly known as SDLT or simply ‘stamp duty’ is a tax paid when buying a property in England and Northern Ireland.
It’s not payable on all property transactions. For example, some first time buyers benefit from stamp duty relief and so may not need to pay any at all.
If you’re buying a property in Wales, you’ll pay Land Transaction Tax instead. In Scotland, you’ll pay Land and Buildings Transaction Tax. This article covers stamp duty only.
What is the stamp duty deadline?
During the Covid-19 pandemic, stamp duty rates were temporarily decreased, and the threshold for first time buyer stamp duty relief increased. This has now come to an end. Since 1st April 2025, the temporarily reduced rates of stamp duty have returned to their previous levels.
There was a rush to complete transactions before 1st April, so buyers could benefit from paying less stamp duty on their home purchases.
Will the stamp duty deadline be extended?
No, the deadline for the end of the stamp duty holiday has not been extended. From 1st April, the higher rates of stamp duty must be paid on all property purchases.
What’s changing for stamp duty?
For first time buyers, there has been a reduction in first time buyer stamp duty relief.
For home movers, stamp duty rates have returned to the higher rates that were previously in place before 7th July 2020.
What is stamp duty relief for first time buyers and why was it introduced?
First time buyer stamp duty relief is designed to reduce the amount of tax paid when you buy your first property.
First time buyer stamp duty relief was first introduced in November 2017 with a threshold of £300,000. The threshold was increased in September 2022 to £425,000. Since the 1st April 2025, the threshold is back down to £300,000. It is designed to help first time buyers get on the property ladder by reducing the upfront cost of purchasing a home.
What stamp duty do I now pay as a first time buyer?
First time buyer stamp duty relief has changed. Between September 2022 and March 2025, first time buyers paid no stamp duty on their property if it cost £425,000 or less. Then, they paid 5% of the property’s value between £425,001 and £625,000. If the property cost £625,001 or more, first time buyer stamp duty relief did not apply, and the normal rates of stamp duty were payable.
Now, first time buyers pay no stamp duty if their property costs £300,000 or less. They then pay 5% of the property’s value between £300,001 and £500,000. If the property costs £500,001 or more, first time buyers are now not eligible for relief and must pay stamp duty at the regular rate.
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What stamp duty do I now pay if I’m moving house?
Stamp duty rates are changing for home movers, too. In July 2022, the stamp duty rates decreased, meaning most home movers paid less stamp duty on their new home. However, the rates have now gone back to their previous levels.
Home movers now pay stamp duty on any purchase that costs more than £125,000. Previously, this threshold was £250,000. Now, stamp duty of 2% of the purchase price between £125,001 and £250,000 must be paid.
The rest of the rates remain the same: 5% of the purchase price between £250,001 and £925,000, 10% of the price between £925,001 and £1.5 million, and 12% of the price above £1.5 million.
I was meant to complete before the stamp duty deadline but didn’t, what can I do?
If you complete your property transaction on the 1st April 2025 or later, you must pay the new higher rates of stamp duty. This applies even if you were due to complete in time for the stamp duty deadline.
If you have been held up by the seller of the property you’re buying, you may be able to negotiate some money off the asking price to account for the increase in stamp duty. However, they are not obliged to agree.
If the delay was caused by your solicitor’s genuine negligence, you may be able to make a claim. Please get in touch with us for more information about professional negligence claims and whether this could be an option for you.
Why was the previous rate of stamp duty abolished?
It’s widely believed that the stamp duty rates have been changed to allow the Labour government to raise more funds through taxation. They need to do this to close the funding gap, meaning the government is spending more money than it’s receiving.
More FAQs
A first time buyer is someone who has never owned a property in the UK or abroad, including inherited property.
You also only count as a first time buyer if you are buying the property to live in – not if you are purchasing a ‘buy to let’ property.
No. If you have inherited property or land in the UK or abroad, you do not count as a first time buyer, since you already own a property. So, you will unfortunately not be able to take advantage of the reduced rate of stamp duty, either now or after the changes come into effect after 31st March 2025.
Many first time buyers do not pay stamp duty, or pay a reduced amount compared to other buyers. This is because of the stamp duty relief that’s designed to make it more affordable to purchase your first home.
As of 1st April 2025, first time buyers pay no stamp duty on the property’s purchase price up to £300,000. Then, 5% is paid on the property’s price between £300,001 and £425,000. If the property is priced at £425,001 or more, first time buyers are not eligible for stamp duty relief and must pay stamp duty at the regular rate of between 2 and 12% of the property’s value above £125,000.
Yes. If you are purchasing the property with someone else, whether it’s a partner, family member, or friend, all parties must be first time buyers to qualify for the stamp duty relief.
There are certain criteria you must meet to be eligible for first time buyer stamp duty relief. The criteria is:
- You and anyone you are buying the property with must be first time buyers (i.e. never owned a property before, in the UK or abroad).
- You’re buying the property with the intention to make it your primary residence (i.e. it’s not a buy to let or a holiday home).
- You must have been in the UK for at least 183 days (6 months) in the 12 months leading up to your property purchase, or you face an additional 2% stamp duty surcharge, regardless of whether you’re a first time buyer or not.
It is common for first time buyers to receive some or all of their deposit as a gift, for example from a family member. You do still count as a first time buyer if you get help with the deposit, as long as everyone you are buying with is also a first time buyer. For example:
- You receive a gift of £25,000 towards your deposit from your parents. Your parents will not own any of the property in exchange for the gift. Both you and your partner, who you are buying the property with, have never owned a property before, so you are still eligible for first time buyer stamp duty relief.
- You are buying a property, but both you and your parent will be joint owners. Your parent is contributing £25,000 towards the deposit, and they have owned a property before. Since you are not both first time buyers, you are not eligible for relief.
Your conveyancer will be able to advise you on whether you are eligible for the relief based on your specific circumstances.
The cost of stamp duty can vary significantly as it’s all based on the purchase price of the home. Here are a few examples of how much stamp duty can cost for both first time buyers and other buyers since 1st April 2025.
Stamp duty is a tax, set by the government, that buyers have to pay when purchasing a property. It applies to leasehold, freehold, and shared ownership purchases, as well as commercial property and land purchases.
The amount of stamp duty you pay depends on a range of factors, namely the property price and whether you’re a first time buyer or not.
As it’s a tax, stamp duty is paid to HMRC.
Stamp duty must usually be paid in full within 14 days of completion – when the property’s ownership is transferred to you.
Your conveyancer will typically calculate the amount of stamp duty you owe, arrange the payment for you, and submit your return to the government.
Currently, there has been nothing to suggest that the government intends to change the stamp duty rates any time soon.
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