First-time buyers: What you need to know about upcoming stamp duty changes…

Are you planning to step onto the property ladder?

If so, it's time to prepare for some important Stamp Duty changes coming in April 2025. These updates could significantly impact first-time buyers, especially those purchasing in areas where property prices tend to push past current thresholds.

The New Stamp Duty Breakdown

From April 2025, the rules for first-time buyers will change:

• 0% on property values up to £300,000

• 5% on property values between £300,000 and £500,000

• If the property price exceeds £500,000, you lose first-time buyer relief entirely and pay standard rates.

For properties beyond the first-time buyer thresholds, the standard Stamp Duty Land Tax (SDLT) rates from April 2025 are as follows:

• 0% on the first £125,000

• 2% on the portion between £125,001 and £250,000

• 5% on the portion between £250,001 and £925,000

What This Means for Buyers

Example 1: A £500,000 Property (First-Time Buyer)

• £0 Stamp Duty on the first £300,000

• 5% Stamp Duty on the next £200,000 = £10,000

• Total Stamp Duty = £10,000

Example 2: A £501,000 Property (First-Time Buyer Losing Relief)

• £0 on the first £125,000

• 2% on the portion between £125,001 and £250,000 = £2,500

• 5% on the portion between £250,001 and £501,000 = £12,550

• Total Stamp Duty = £15,550

In this scenario, losing first-time buyer relief for crossing the £500,000 threshold results in an extra £5,550 in tax on just a £1,000 price increase.

Why It Matters

For many first-time buyers—especially in high-cost areas like London—property prices often hover around these thresholds. These new rules could mean the difference between affording your dream home or needing to stretch your budget further. If you’re eyeing a property near or above £500,000, it is important to be strategic about timing and budgeting to save you thousands.