There are significant Stamp Duty Land Tax (SDLT) changes in 2025, that those making any property-related plans in the coming months should be aware of.
For certain buyers, from 1 April 2025, the changes could potentially mean up to a staggering 128% increase in the most severely affected transactions.
These updates will impact first-time buyers and other property purchasers alike, the West London property market is likely to experience some effect, especially since average property prices often exceed national thresholds.
In this blog, we explain the SDLT changes, compare costs for different buyer types, and use examples based on local property data to help you understand how the changes might affect you.
Stamp Duty Land Tax Explained
Stamp Duty Land Tax (SDLT) is a tax on property purchases, payable when the transaction is completed. The amount depends on factors such as property price, buyer type (first-time or standard buyer), and whether it is an additional property.
Currently, first-time buyers benefit from SDLT relief on properties £625,000 or less. However, the upcoming changes will reduce this threshold and increase SDLT for many buyers. Here’s what you need to know about the changes that were announced in the Autumn Budget.
Key SDLT Changes from 1 April 2025
1. First-Time Buyers Lose Out on Higher-Value Properties
First-time buyer relief will no longer apply to properties above £500,000, compared to the current threshold of £625,000. For West London buyers, where property prices frequently exceed this range, this means first-time buyers will face the same SDLT rates as standard buyers.
2. Introduction of a 2% Charge on Lower-Value Band
A new 2% rate will apply to properties priced between £125,001 and £250,000. This affects all buyers introducing around an additional £2,000 charge on average property purchases in West London.
3. Slight increases to tax on all purchases
For most home movers the SDLT changes will result in small increases. For example, on a property priced at £1,000,000, SDLT will rise from £41,250 to £43,750. While this increase is modest, it adds further costs for buyers.
4. Pressure to complete transactions before April 2025
The combination of these changes is likely to create urgency in the market, with buyers keen to complete transactions before the new rules take effect. This could lead to heightened demand in early 2025.
What Is First-time Buyer Relief?
First-time buyers, those who have not bought a house before, and intend to occupy the property as their main residence, can qualify for relief.
Currently, this is where first-time buyers don’t pay SDLT for those properties bought for up to £425,000. If the property is bought for over £425,000, but no higher than £625,000, first-time buyers will pay 5%. For properties bought for over £625,000, first-time buyers cannot claim the relief and will pay the standard rates on the total purchase price.
What Are The Changes to the First-time Buyer Relief?
First-time buyer relief, which currently applies to purchases up to £625,000, will be reduced to £500,000. Properties exceeding £500,000 will no longer qualify for relief and will be subject to the same tax as those who have bought a home previously.
Additionally, while currently, the threshold for paying SDLT for first-time buyers is £425,000, this will change in April 2025 to £300,000.
How is SDLT calculated for first-time buyers?
You can claim the first-time buyer relief if the property you buy is your first home and if you and anyone else you’re buying with are first-time buyers.
Stamp Duty Land Tax (SDLT) is calculated on the purchase price of a property in bands, where each portion of the property price is taxed at a specific rate. This tiered system ensures that higher rates apply only to the portion of the price within each band, rather than to the entire property value.
SDLT for First-Time Buyers
| Purchase Price (£) | SDLT Before April 2025 (£) | SDLT After April 2025 (£) |
| 400,000 | 0 | 5,000 |
| 450,000 | 1,125 | 7,500 |
| 500,000 | 3,750 | 10,000 |
| 600,000 | 8,750 | 20,000 |
| 750,000 | Not Applicable | Not Applicable |
For purchases at £600,000, this marks an increase of almost 130%.
SDLT Percentage for First-time Buyers
| Purchase Price (£) | SDLT Before April 2025 | SDLT After April 2025 |
| Up to 300,000 | 0% | 0% |
| 300,001 – 425,000 | 0% | 5% |
| 425,001 – 500,000 | 5% | 5% |
| 500,001 – 625,000 | 5% | Standard Rates Apply |
| Above 625,000 | Standard Rates Apply | Standard Rates Apply |
How the Changes Affect Standard Buyers
Standard buyers will also face adjustments, particularly in the lower price brackets. The reintroduction of a 2% rate between £125,001 and £250,000 will increase costs marginally for most buyers.
SDLT for Standard Buyers
| Purchase Price (£) | SDLT Before April 2025 (£) | SDLT After April 2025 (£) |
| 400,000 | 7,500 | 10,000 |
| 450,000 | 10,000 | 12,500 |
| 500,000 | 12,500 | 15,000 |
| 600,000 | 17,500 | 20,000 |
| 750,000 | 25,000 | 27,500 |
SDLT Percentage Changes for Standard Buyers
| Purchase Price (£) | SDLT Before April 2025 | SDLT After April 2025 |
| Up to 125,000 | 0% | 0% |
| 125,001 – 250,000 | 0% | 2% |
| 250,001 – 925,000 | 5% | 5% |
| 925,001 – 1,500,000 | 10% | 10% |
| Above 1,500,000 | 12% | 12% |
Second homes and investment properties
Almost immediately after the Autumn Budget, as of 31 October 2024, the UK government increased the Stamp Duty Land Tax (SDLT) surcharge for additional residential properties from 3% to 5% above the standard rates.
This change affects purchases of second homes, buy-to-let investments, and holiday properties.
From April 2025 there will be an additional charge of 2% for the portion between £125,000 and £250,000 which will further add cost to these types of purchases.
SDLT Rates for Additional Properties: Before and After April 2025
| Property Value (£) | Rate Before April 2025 | Rate After April 2025 |
| Up to £125,000 | 5% | 5% |
| £125,001 to £250,000 | 5% | 7% |
| £250,001 to £925,000 | 10% | 10% |
| £925,001 to £1.5 million | 15% | 15% |
| Above £1.5 million | 17% | 17% |
It is prudent to take advice from tax professionals when purchasing additional properties.
Stamp Duty Land Tax Changes in 2025 might impact your plans
With the upcoming changes to Stamp Duty Land Tax (SDLT) in April 2025, now is a strategic time to consider your next property move. While adjustments to SDLT will mean higher costs for some buyers, there are also opportunities in the market, particularly for those with properties under £600,250. For both buyers and sellers, seeking tailored advice is crucial to make the most of the current market conditions.
Whilst there isn’t a need to panic as the market will readjust and adapt when the changes come into force, for certain buyers, acting now could help you save thousands of pounds in SDLT.
Potential sellers should consider that the increased costs for buyers is likely to affect their offering levels and budgets a couple of months prior to the changes due in April due to the conveyancing timeframes – now is the time to act if you require a sale to be secured and completed prior to Aprils Stamp Duty changes.
For expert guidance tailored to your circumstances, contact us. Our experienced team is here to help you navigate these changes and make informed decisions.
