With house prices struggling, mortgage rates climbing, and the wider cost of living crisis hitting affordability, the housing market faces some major challenges.
For prospective buyers, the difficult affordability situation means it’s crucial to know exactly how much you may need to pay in additional fees and taxes. One of the most costly of these extras is stamp duty.
The property tax - which some describe as the “worst tax in Britain” - has changed several times since 2020, and is set to change again from 1 April 2025. During the pandemic, it was temporarily suspended by then-Chancellor Rishi Sunak in a bid to get the housing market moving. This stamp duty holiday sent house prices soaring as buyers rushed to take advantage of it.
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Then, in the disastrous mini-Budget, Kwasi Kwarteng announced a permanent cut to the tax which was intended to help first-time buyers get onto the property ladder. His successor as Chancellor, Jeremy Hunt, watered down the measure in the follow up fiscal event that came after Rishi Sunak was made Prime Minister.
So, what can you expect to pay in stamp duty - and what will happen after March 2025? We’ve got all the information you need, as well as a stamp duty calculator.
Stamp duty calculator: how much will you pay?
Home buyers in England will see the amount of tax they pay vary depending on the price bracket or brackets their property falls into. First-time buyers get a discounted rate, while buyers in Scotland and Wales face a different form of tax (more on this below). Non-residential property or land is also subject to different taxes and rates.
Here’s what you will pay in stamp duty, depending on the value of the home you’re buying:
| Property cost | Stamp duty rate per band | Max. you could pay per band |
| Up to £250,000 | 0% | £0 |
| £250,001 to £925,000 | 5% | £33,750 |
| £925,001 to £1.5m | 10% | £57,500 |
| £1.5m+ | 12% | £60,000* |
*assuming property price of £2m
Before these temporary rates came in, you would have to pay stamp duty on anything over £125,000. The Treasury says the doubling of this threshold means buyers are saving up to £2,500 per transaction.
Meanwhile, first-time buyers are currently exempt from paying the tax up to an amount of £425,000 (it used to be £300,000) and can access relief of up to £8,750 on homes costing up to £625,000. The government says this regime means 78% of first-timers are paying nothing in stamp duty, while 46% of all buyers are also not having to pay the tax.
Is stamp duty changing?
When Jeremy Hunt delivered the Autumn Statement 2022, he suggested he would replace stamp duty with a new scheme once the temporary set of discounts ended at the end of March 2025. He said: ”The stamp duty cuts announced in the mini-Budget will remain in place but only until 31st March 2025. After that, I will sunset the measure, creating an incentive to support the housing market and all the jobs associated with it by boosting transactions during the period the economy most needs it.”
However, if a recent report in The Times is correct, the changes that could be on the way are somewhat less radical than Hunt made them sound 18-months ago. Instead of a brand new way of raising tax revenues through property transactions, the newspaper reported that Hunt is considering raising the 0% band to £300,000.
MoneyWeek asked the Treasury what changes it will make to stamp duty after the current set of rates expires next spring. It did not provide a comment. It means we are unlikely to find out what will change until the next Budget event. Some commentators predict it could come before the next general election, with the Conservatives expected to line up more tax cuts in a bid to woo voters.
How much property tax could you pay in Scotland and Wales?
As we’ve already mentioned, Scotland and Wales have different property tax regimes. The devolved government in Edinburgh replaced stamp duty with the Land and Buildings Transaction Tax (LBTT) in 2015, while the Welsh government replaced it with the Land Transaction Tax (LTT) in 2018.
Land and Buildings Transaction Tax in Scotland
The rates of LBTT are set by the Scottish government and are locked in until 2026. Here’s what the bands look like:
| Property cost | LBTT rate per band | Max. you could pay per band |
| Up to £145,000 | 0% | £0 |
| £145,001 to £250,000 | 2% | £2,100 |
| £250,001 to £325,000 | 5% | £3,750 |
| £325,001 to £750,000 | 10% | £42,500 |
| Over £750,000 | 12% | £30,000* |
*Assuming property price of £1m
First-time buyers are exempt from paying anything up to a value of £175,000. While all of these bands may sound low, property north of the border tends to be significantly cheaper than what you could pay in England and Wales.
Land Transaction Tax in Wales
The devolved administration in Cardiff does not offer special rates for first-time buyers. Here’s what you will pay in Wales:
| Property cost | LTT rate per band | Max. you could pay per band |
| Up to £225,000 | 0% | £0 |
| £225,001 to £400,000 | 6% | £10,500 |
| £400,001 to £750,000 | 7.5% | £26,250 |
| £750,001 to £1.5m | 10% | £75,000 |
| Over £1.5m | 12% | £60,000* |
*Assuming property price of £2m
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