There were several key announcements on stamp duty in the recent Autumn Budget which impacts properties in England and Wales. Scotland have separate legislation around property tax.
The main headline was the increase in the stamp duty surcharge for buying an additional property. This increased from 3% to 5% with immediate effect. The increase will mainly impact the buy to let market and will mean additional costs to anyone buying a property for investments, including a purchase via a limited company. It will also impact anyone buying a second home/ holiday home. Increasing the higher rates of stamp duty on purchases of residential property is expected to disincentive the acquisition of second homes and buy-to-let properties, freeing up housing stock for main home and first-time buyers.
The other key point to come out of the Autumn Budget was the lack of any announcement on the current stamp duty levies for main residences which are due to revert to previous levels on 1st April 2025. It was hoped that the current levels may have been either extended or made permanent, however that’s not the case and so this will have a much bigger impact on the property market and will affect anyone looking to buy a home after 1st April 2025:
Non-first-time buyers
Currently, there is no Stamp Duty on the first £250,000 of the property. From 1 April, that will drop down to the first £125,000 and buyers will pay 2% up to £250,000. This means anyone buying a property over £250,000 will pay an extra £2,500 Stamp Duty. The charges above £250,000 remain the same.
First-time buyers (FTB)
There are two changes in this category of buyer. Currently FTB’s don’t pay Stamp Duty on the first £425,000 but this will be reducing £300,000. Additionally, if the purchase price is above £500,000, reducing from £625,000, they will not get any of this first-time buyer relief.
Stamp duty rates from 1 April 2025 (England & Northern Ireland)
| PURCHASE PRICE | MAIN RESIDENCE | SECOND HOME /
ADDITIONAL PROPERTY |
| Up to £125,000
(£300,000 for first-time buyers) |
0% | 5% |
| £125,001 – £250,000 | 2% | 7% |
| £250,001 – £925,000 | 5% | 10% |
| £925,001 – £1,500,000 | 10% | 15% |
| £1,500,001 + | 12% | 17% |