Stamp Duty Changes: What First-Time Buyers / Homebuyers Need to Know

Big changes are coming to Stamp Duty Land Tax (SDLT), and whether you’re a first-time buyer or a homeowner looking to move, these adjustments could have a significant impact on your property plans. These changes are set to take effect on 31 March 2025, the new rates will introduce higher tax liabilities, and the countdown is on for those wanting to lock in current savings before the deadline.

What is Stamp Duty?

Stamp Duty Land Tax is a tax paid to HM Revenue and Customs (HMRC) when you buy property or land in England and Northern Ireland. The amount you pay depends on various factors, such as whether you are a UK resident, buying as an individual or a company, a first-time buyer, or purchasing an additional property.

In September 2022, the government temporarily increased the tax-free thresholds for SDLT, allowing buyers to save more on property purchases. However, these temporary relief measures are due to end on 31 March 2025, after which new (and higher) rates will apply.

Key Differences for First-Time Buyers and Homebuyers After March 2025

One of the most significant changes in the Stamp Duty landscape is the difference in how it affects first-time buyers versus regular homebuyers.

First-Time Buyers

First-time buyers currently enjoy significant SDLT relief, but those benefits will be reduced in 2025. Here’s what’s changing:

• Current Relief (Until 31 March 2025):
• No Stamp Duty on the first £425,000 of the property value.
• For properties priced up to £625,000, buyers pay 5% on the portion between £425,000 and £625,000.
• Post-March 2025 Changes:
• The nil-rate threshold will decrease from £425,000 to £300,000.
• The maximum property value eligible for first-time buyer relief will drop from £625,000 to £500,000.

This change will result in significantly higher Stamp Duty costs for first-time buyers purchasing properties priced above £300,000, making it more difficult to get on the property ladder. For instance, someone buying a £499,999 property after March 2025 would pay £9,999 in SDLT, compared to just £3,749 before the change. This increase might push some first-time buyers to reconsider or delay their purchase.

Homebuyers Replacing a Main Residence

For homebuyers who are not first-time buyers and are simply moving homes, the changes will also introduce higher tax liabilities.

• Current Rates (Until 31 March 2025):
• No Stamp Duty on the first £250,000 of the property value.
• A 5% charge applies to the portion between £250,000 and £925,000.
• Post-March 2025 Rates:
• The tax-free threshold will decrease to £125,000.
• The 2% rate will apply to the next portion up to £250,000, followed by 5% on the amount up to £925,000.

For homebuyers purchasing a property in Ashford or Staines valued at £354,767, the tax liability will rise from £5,238 to £7,738 after March 2025. That’s an additional £2,500 just by completing after the deadline.

Impact on the Market: Should You Buy Now?

With these changes looming, many buyers — particularly first-time buyers — might feel the pressure to complete their purchases before the new rates take effect. The savings can be substantial. For instance, a first-time buyer purchasing a property for £625,000 before March 2025 would save over £11,000 compared to waiting until after the changes come into play.

Even for those not buying their first home, the difference in SDLT could be as high as £2,500 for properties in the mid-price range, which could make a difference for many households.

Final Thoughts

These upcoming changes in Stamp Duty may seem far away, but with the average property transaction taking 12–16 weeks (and sometimes longer), it's worth factoring these new rates into your decision-making now. First-time buyers, in particular, stand to lose more from the changes, so planning your purchase before the deadline could result in substantial savings.

For all buyers — whether first-timers or seasoned homeowners — it's essential to stay informed and consider how these tax adjustments will influence your home-buying journey.

If you're unsure about how these changes will impact your specific situation, our team is here to help guide you through the details. Don’t wait until the last minute — start preparing now to make the most of the current SDLT relief!

If you would like to discuss this in further detail, please feel free to get in touch with our team who also have access to in-house financial advisers for all your cost of moving questions and queries.

Get in touch here.