Quick take: From 1 April 2025, stamp duty thresholds in England and Northern Ireland reverted to lower levels. First-time buyer relief now applies only to properties up to 500,000 pounds. Many buyers are still budgeting on the old rates. Here is what actually applies now.

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Current Stamp Duty Rates (From April 2025)

Stamp Duty Land Tax (SDLT) applies to property and land purchases in England and Northern Ireland. Scotland and Wales have their own equivalents (LBTT and LTT respectively) with different rates.

• Up to 125,000 pounds: 0%

• 125,001 to 250,000 pounds: 2%

• 250,001 to 925,000 pounds: 5%

• 925,001 to 1,500,000 pounds: 10%

• Above 1,500,000 pounds: 12%

1. First-Time Buyer Relief

First-time buyers purchasing a property up to 625,000 pounds previously paid no tax on the first 425,000. From April 2025, the relief reverted:

• No SDLT on the first 300,000 pounds

• 5% on the portion from 300,001 to 500,000 pounds

• Relief is not available if the purchase price exceeds 500,000 pounds

In practical terms, a first-time buyer purchasing a property for 350,000 pounds now pays 2,500 pounds in stamp duty. Before April 2025, the same purchase attracted no stamp duty at all. That is money that needs to come from savings or be factored into the budget.

2. The Additional Property Surcharge

If you already own a property (including buy-to-let or inherited property), there is an additional 5% surcharge on top of the standard rates for purchases completing from 31 October 2024 onwards. Previously this surcharge was 3%.

A landlord purchasing a second property for 250,000 pounds would pay the standard SDLT of 2,500 pounds plus the 5% surcharge of 12,500 pounds, totalling 15,000 pounds. That is a significant chunk of the deposit.

3. Common Mistakes

• Assuming old rates still apply: If your purchase completes after 1 April 2025, the new lower thresholds apply regardless of when you made your offer

• Forgetting the surcharge applies to inherited property: Even if you own more than a 50% share of an inherited property, the surcharge applies to your next purchase

• Confusing England rates with Scotland or Wales: SDLT only applies in England and Northern Ireland. Scotland uses LBTT and Wales uses LTT, each with different thresholds

• Not reclaiming the surcharge when selling: You may be able to reclaim the surcharge if you sell your previous main residence within 36 months of the new purchase

FAQ

Where do I find the official calculator?

HMRC provides an official stamp duty calculator on GOV.UK. It is worth using this rather than relying on estimates from property portals, which may not reflect the April 2025 changes.

Does stamp duty apply to auction purchases?

Yes. Stamp duty applies in exactly the same way. Your conveyancer pays it on your behalf from the completion funds. Remember to factor it into your maximum bid.

Disclaimer: This article is general information, not financial, tax, or legal advice.