How much stamp duty will I pay in 2025?

Homebuyers have benefited from lower stamp duty bills in recent years, but the threshold at which you start paying the controversial property tax will drop at midnight tonight (31 March 2025). This means buyers will pay more when making a purchase from 1 April.

The tax-free allowance will drop from £250,000 to £125,000 for regular buyers, and from £425,000 to £300,000 for first-time buyers.

Alice Haine, personal finance analyst at investment platform Bestinvest, says the changes will “deliver a particularly heavy hit to first-time buyers, who will not only need to raise enough money for a deposit but also enough to cover the higher tax bill”.

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Those who live in areas like London and southern England, where house prices are highest, could also be hit disproportionately.

Buyers have been rushing to beat the deadline, resulting in a busy few months for the property market. Bank and mortgage lender Santander reported a 130% year-on-year increase in mortgage applications in the final quarter of 2024.

Those who didn’t get their offer in before the end of January were unlikely to meet the deadline. Buyers who were scuppered by an unexpected survey result or someone pulling out of the chain may also have been left disappointed.

Even if you missed the boat, the good news is there are still steps you can take to reduce the cost of moving. “Many will look to try and split the difference with sellers which is why house price growth is starting to slow,” explains Richard Donnell, executive director at property website Zoopla.

As well as offsetting part of your bill with a lower offer, it could be worth shopping around for a lower mortgage rate if you completed your original application several months ago. Interest rates are on a downward trajectory, and some sub-4% mortgage deals returned to the market earlier this year.

What do April’s stamp duty changes mean for you?

Over the past year, UK house prices have risen to £269,000 on average, according to official data from HM Land Registry. This leaves the typical buyer (i.e. someone who has owned a property before) with a stamp duty bill in the region of £950. Once the thresholds revert to their original levels from 1 April, this will increase to £3,450.

Naturally, those purchasing a more expensive property will face an even larger bill. The average property in London costs almost £564,000, resulting in a stamp duty bill of around £15,700 at current thresholds. From April, this will also rise by £2,500 to a whopping £18,200.

For this reason, property website Zoopla has previously said stamp duty is “essentially a tax on moving home in southern England”.

HMRC data shows that 78% of stamp duty revenue comes from the southern part of the country (London, the South East, the South West and the East of England), with 58% coming from London and the South East alone.

^{Based on average house prices from HM Land Registry as of January’s report, published on 26 March 2025. Calculations assume the buyer has owned a property before and does not qualify for first-time buyer relief.}

How will stamp duty changes impact first-time buyers?

The government gives first-time buyers some additional relief to help them climb the first rung of the ladder. Until midnight on 31 March, they don’t have to pay any stamp duty on the first £425,000 of the property. This threshold will drop to £300,000 from 1 April.

There are limits on this relief, though. Buyers only qualify for the additional allowance if the value of the property is less than £625,000, falling to £500,000 from 1 April. Unlike some other tax allowances, this one isn’t tapered. It disappears entirely once you cross the threshold.

As a result, first-time buyers in pricey areas like London (where the average house price is higher than the new £500,000 limit) could see a particularly sharp spike in their tax bill, being hit by a double-whammy of threshold cuts.

The difference this could make to a tax bill is staggering. A first-time buyer purchasing an average-priced house in London (£564,000) will go from paying £6,950 in stamp duty before the deadline, to £18,200 from 1 April.

If you purchase a property for less than £500,000, the impact of the upcoming changes to first-time buyer relief will be less dramatic. Using the government’s stamp duty calculator can help you understand how much the changes will impact you.

How to manage the stamp duty hike

Those who narrowly miss out on the deadline will undoubtedly be disappointed, but it could make sense to continue with the transaction if you are otherwise happy with the property. You will have already built up significant costs including legal and survey fees, and finding another property that meets all your criteria may not be easy.

If you are yet to put in an offer, or have only recently made one, it could be worth knocking a couple of thousand pounds off the price to offset the effect of the stamp duty hike. The seller may not be willing to swallow the full effect, but you might be able to split it. Use the government’s calculator to see how much of a difference the threshold drop will make to your transaction, and go from there.

The good news for buyers who miss the deadline is that, after a flurry of activity at the end of 2024, the market should be less competitive over the next few months. Buyers could have more negotiating power as a result.

“The latest money and credit statistics from the Bank of England show the changes to stamp duty… have had a significant dampening effect on the property market,” said Thomas Lambert, financial planner at wealth management company Quilter.

“Net mortgage borrowing decreased by £0.9 billion to £3.3 billion in February, likely due to people putting home moves on hold as they’d missed the opportunity to get a sale across the line in time,” he added.

Finally, if you are partway through the purchasing process and already have a mortgage offer from the bank, remember that you aren’t tied in until the contracts have been exchanged. If mortgage rates drop, you are free to shop around for a better deal. This could help you claw back some money over the longer term. Just remember that the mortgage approval process can take a number of weeks.