Important Stamp Duty Changes Coming in April 2025 – What First-Time Buyers Need to Know

From April 1st, 2025, Stamp Duty rates in England and Northern Ireland will change as the temporary increase in thresholds comes to an end. While these changes will affect all homebuyers, first-time buyers are expected to feel the most significant impact. If you’re looking to buy your first home, here’s everything you need to know.

What is Stamp Duty?

Stamp Duty is a tax you pay when purchasing a property above a specific price threshold. The tax amount depends on the property’s purchase price, not the mortgage amount.

Currently, first-time buyers enjoy a tax-free allowance on properties up to £425,000. They also pay a reduced 5% rate on properties priced between £425,001 and £625,000.

For other buyers, the current Stamp Duty rates are as follows:

• 0% on the first £250,000

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

• 10% on the portion between £925,001 and £1.5 million

• 12% on any amount above £1.5 million

  
  

What Will Change in April 2025?

From April 2025, buyers in England and Northern Ireland will pay Stamp Duty on properties over £125,000, down from the current threshold of £250,000.

For first-time buyers, the threshold for a tax-free allowance will reduce from £425,000 to £300,000.

How Will This Impact First-Time Buyers?

The reduced tax-free threshold still provides some relief, but it narrows the range of properties available without tax, particularly in areas with higher average house prices. This may require first-time buyers to adjust their budgets or focus on homes under the £300,000 limit to minimize Stamp Duty costs.

Despite these changes, Amanda Bryden, Head of Mortgages at Halifax, believes this change will motivate first-time buyers to act sooner. "The upcoming Stamp Duty adjustments have given prospective first-time buyers even greater incentive to get on the housing ladder and accelerate their home-buying plans."

Daniel Lee, Area Manager at The Venmore Group, also weighs in:“First-time buyers will still be eager to purchase despite the upcoming Stamp Duty changes, but the lower threshold could present challenges for those with smaller deposits. With higher upfront costs, some buyers may need to adjust their budgets or consider alternative financing options. However, the demand for homeownership remains strong, and with the right advice, buyers can navigate the market effectively.”

At Hashtag Estates, we’re here to guide you through every step of your property journey. Feel free to reach out if you have any questions about these changes and how they may impact your home-buying plans!