Stamp Duty increases - May 13th 2025

The cost of stamp duty on a residential property in England and Northern Ireland has gone up from 1 April 2025. All property purchases are affected, although landlords and first-time buyers might be able to reduce the charge.

The increased stamp duty cost is a result of the temporary nil-rate threshold of £250,000 reverting back to the pre-23 September 2022 level of £125,000. The first-time buyer discounts have also fallen back to where they previously were.

Although the stamp duty cost for Scottish and Welsh landlords has recently gone up, there are no threshold changes for residential property purchases generally.

Landlords

The reduction of the stamp duty threshold from £250,000 to £125,000 means an additional cost of £2,500 for anyone purchasing a property costing £250,000 or more, with the extra £125,000 of the purchase price now brought into charge taxed at 2%.

Landlords in England and Northern Ireland experience this rise on top of the 2% surcharge increase that came in for purchases from 31 October 2024 onwards. Landlords will have seen their stamp duty cost on, for example, a £400,000 property purchase go up from £19,500 (pre-31 October 2024) to £27,500 (pre-1 April 2025) to £30,000 (currently) – a more than a 50% increase.

Two ways in which more adventurous landlords can drastically reduce the amount of stamp duty payable are by buying mixed-use property (such as a shop with a flat above it), or commercial property and then obtaining planning permission to convert the property into residential use.

Both suggestions work equally well in Scotland and Wales. Note, however, that conversion is a complex area, and expert advice is recommended. In both cases, duty will only be charged at non-residential rates, so, for that £400,000 purchase, the cost will be reduced to £9,500 in England and Northern Ireland – a saving of £20,500.

First-time buyers

Following the threshold reductions, first-time buyers in England and Northern Ireland now only benefit from complete stamp duty exemption on property purchases costing £300,000 or less (previously £425,000).

For purchases costing between £300,000 and £500,000, duty at the rate of 5% is paid only on the excess over £300,000. No relief is available if the purchase price exceeds £500,000 (previously £625,000).

Those purchasing at prices just over £500,000 should try and negotiate a discount. For example, a £1,000 reduction on a property originally priced at £501,000 will save £5,050 in stamp duty.