Stamp Duty Guide & Changes in 2025

This stamp duty guide is designed for people buying or selling a house. We deal in properties across London, in areas as diverse as Swiss Cottage, Camden, Kilburn, Pimlico and Maida Vale, and we’re used to dealing with questions about stamp duty.

In this guide we’ll look at the need-to-know aspects of stamp duty, such as stamp duty rates, how to calculate stamp duty and the stamp duty changes in 2025.   

What is Stamp Duty? 

Stamp duty, or Stamp Duty Land Tax (SDLT) is a tax you pay when buying a home in England or Northern Ireland. The amount you pay depends on: 

• The value of the property 
• Whether you are a first-time buyer 
• Whether or not this is your only property 

Stamp duty is payable by the buyer and not the seller, and usually, the buyer’s solicitor will arrange for the payment to be made to HMRC by the required deadline. 

Stamp Duty Thresholds Changing in 2025 

In the Autumn Budget of 2024 the UK government announced changes to several aspects of stamp duty. These included shifts in the stamp duty threshold. The stamp duty threshold is the price at which buyers have to start paying stamp duty.  

Up to 31^st March 2025 the thresholds were as follows: 

• £250,000 for residential properties   
• £425,000 for first-time buyers buying a residential property worth £625,000 or less   
• £150,000 for non-residential land and properties 

From 1^st April 2025 these thresholds will be as follows: 

• £125,000 for residential properties 
• £300,000 for first-time buyers buying a residential property worth £500,000 or less 
• £150,000 for non-residential land and properties 

Want to know more? Explore questions to ask when buying a leasehold flat and what a mews house is.

Stamp Duty Rates Changes  

There are several factors which impact how much stamp duty is when you purchase a home. Things which can impact the rate include: 

• Whether the property is being purchased to be used as a residential property or, alternatively, as a non-residential or mixed use property 
• Whether you, as the buyer are eligible for any exemptions 

The rate of stamp duty charged will differ if: 

• You are a first time buyer 
• You already own a property and are buying a second home 
• You are not a UK resident 

Up to 31^st March 2025, the stamp duty rates were as follows: 

• Up to £250,000 – 0% 
• £250,001 to £925,000 – 5% 
• £925,001 to £1,500,000 – 10% 
• £1,500,001 or over – 12% 

From 1^st April 2025 the rates will be revised as follows: 

• Up to £125,000 – 0% 
• £125,001 to £250,000 – 2% 
• £250,001 to £925,000 – 5% 
• £925,001 to £1,500,000 – 10% 
• £1,500,001 or over – 12% 

How Do I Calculate My Stamp Duty Bill? 

Stamp duty is calculated according to the portion of the property price that falls into each band. For example, if you purchase a property in Chelsea central London for £875,000 you will pay: 

• 0% on the first £125,000 = £0 
• 2% on the amount between £125,001 and £250,000 = £6,249.95 
• 5% on the amount between £250,001 and £875,000 = £31,249.95 
• Total stamp duty = £37,499.90  

The good news is that you don’t have to work this out for yourself, as places such as the government’s own website feature stamp duty calculator tools. Simply enter the details asked for and the details of the property to find out how much stamp duty you’ll need to pay.  

Do I Qualify For First Time Buyer Stamp Duty Relief? 

Tax relief on stamp duty is available for first time buyers in England and Northern Ireland. As with thresholds and overall rates, the figures used to calculate tax relief for first time buyers will change from April 2025. If you qualify as a first time buyer, then the relief available up to March 31^st 2025 worked as follows: 

• Up to £425,000 – 0% 
• £425,001 to £625,000 – 5% 
• Stamp duty on properties costing more than £625,000 will be charged as normal, with no tax relief 

From 1^st April 2025 the tax relief on stamp duty for first time buyers will be calculated as follows: 

• Up to £300,000 – 0% 
• £300,001 to £500,000 – 5% 
• If the property costs more than £500,000 then you won’t be able to claim tax relief 

For example, if you purchase a one bedroom flat in Camden for £475,000, and qualify for the first time buyer tax relief, then from 1^st April 2025 you will be charged as follows: 

• Up to £300,000 = £0 
• £300,001 to £475,000 = £8,749.95 

Stamp Duty On Second Home Explained 

If you are buying a second home or a buy-to-let property from 1^st April 2025, you must pay a 5% surcharge on top of the standard rates outlined above. 

The following stamp duty rates will apply for second-home buyers and buy-to-let landlords: 

• Up to £125,000 – 5% 
• £125,001 to £250,000 – 7% 
• £250,001 to £925,000 – 10% 
• £925,001 to £1,500,000 – 15% 
• £1,500,001 and over – 17% 

If you bought your new home before selling your previous one, you would still need to pay this 5% levy. However, if you sell your previous main home within three years and the additional home is now your main one, you can claim a refund of the 5% surcharge you paid. 

Want to find out more? Discover what buyers and renters want and things to know when getting a mortgage.

Stamp Duty On Leasehold Property  

If you buy a leasehold property, from April 1^st 2025 you will have to pay stamp duty on the price of the lease, using the rates outlined above. Prior to April 1^st the rates charged up to 31^st March 2025 will apply. The surcharge for purchasing a second property will apply, as will the first time buyer relief.  

If the rent charged over the life of the lease is higher than the stamp duty threshold of £125,000, then stamp duty will be charged at 1% on the amount over the threshold.  

Stamp Duty On Listed Buildings  

If the property purchased is a listed building stamp duty is still payable, but the calculation is more complex. In simple terms, stamp duty on a listed building is payable in exactly the same way – and with the same reliefs and surcharges – as on any other kind of building. The complicating factors arise if the building was vacant for two years prior to being purchased, or if it needs to be renovated. Both of these may entitle the buyer to stamp duty exemptions or reliefs.

If major renovations are needed because of the listed status of the building, then the cost of the work might be deducted from the value used to calculate the stamp duty payable. The complex and variable nature of this calculation means that anyone purchasing a listed building should take professional advice on the stamp duty they will have to pay.   

Does A Limited Company Pay Stamp Duty? 

Yes, limited companies purchasing residential properties have to pay stamp duty in the same way as individuals. This is true even if you are selling your own home to your own limited company. The stamp duty rates charged on limited companies are as follows: 

• Up to £125,000 – 5% 
• £125,001 to £250,000 – 7% 
• £250,001 to £925,000 – 10% 
• £925,001 to £1,500,000 – 15% 
• £1,500,001 and over – 17% 

Stamp Duty For Non-UK Residents  

Non-UK residents buying property in England and Northern Ireland are subject to an additional 2% on top of the regular rates. Non-UK residents purchasing an additional property must pay both the second home surcharge and the overseas resident surcharge, effectively increasing the rates by 5%.

A non-UK resident, for the purposes of stamp duty rates, is someone not present in the UK for at least 183 days during the 12 months before their purchase. 

Can I Avoid Stamp Duty? 

There are some circumstances where stamp duty is not required to be paid, such as if you inherit a property or if ownership is transferred to you as a result of a divorce settlement. 

Haggling the price of the property to factor in any costs for repairs that come up in the survey can help you to reduce stamp duty. If the property price is just above a stamp duty threshold, you could negotiate the price to below the threshold to avoid paying stamp duty. 

It is also worth noting that stamp duty does not apply to moveable furniture and fittings you are buying from the previous owners. This would include freestanding furniture, carpets and curtains but exclude anything attached to the building, like bathroom and kitchen fittings and built-in cupboards.

You can subtract the price you paid for moveable items from the property’s purchase price before calculating stamp duty. Do not be tempted to exaggerate these items’ prices to reduce your stamp duty bill. HMRC conduct regular spot checks and will require you to justify the value of the fixtures. 

Can I Claim Back Stamp Duty? 

You may be able to claim a refund of stamp duty paid in the following circumstances: 

• You paid the 5% surcharge on stamp duty for purchasing a second home, but then sell your previous home within 3 years.  
• You paid the 2% surcharge on stamp duty if you were not a UK resident at the time of purchase, but have since become a ‘UK resident’ for stamp duty purposes – see the government website for the rules covering stamp duty UK residence here.   
• You failed to claim an exemption to which you were entitled at the time of purchasing the home.  

Can I Add Stamp Duty To My Mortgage? 

Yes, borrowing more on your mortgage to cover stamp duty is usually possible if you do not have the funds readily available to pay it. However, this will depend on how much your mortgage provider is willing to lend to you. It could also mean paying a higher interest rate if the extra money borrowed increases the loan-to-value. 

When Do You Pay Stamp Duty? 

You have 14 days from completion to pay any stamp duty that is due. Usually, your conveyancing solicitor will do this for you, having collected the money from you in advance. 

Stamp Duty Exemptions And Reliefs In 2025  

There are certain circumstances in which buyers can claim relief or exemption from stamp duty. A relief is a reduction in the amount of stamp duty owed, while an exemptions means that it doesn’t have to be paid at all. Reliefs are available for people such as first time buyers, people buying right to buy properties, crown employees, registered providers of social housing and employers buying an employee’s house. 

Exemptions are more likely to apply on the basis of the circumstances of a property changing hands, rather than the identity of the buyer. Buyers may be exempt from paying stamp duty if: 

• No money or other payment changed hands  
• The property was left to you in a will 
• The property is transferred following a divorce or the dissolution of a civil partnership 
• The freehold property is worth less than £40,000 
• The purchase is of a new or assigned lease of less than 7 years, if the premium is less than £40,000 and the annual rent less than £1,000 
• The purchase was made using alternative property financial arrangements, such as those which comply with Sharia law, meaning the alternative financial provider pays stamp duty when they buy the property 

If you’re thinking of buying a property in a central London area such as Chelsea, South Kensington, Fitzrovia or Hampstead then you need to take the possibility of a stamp duty bill into account. With exemptions and reliefs available, and the amount charged varying depending upon the value of the property, it pays to get in touch with the experts at Plaza Estates.

We can show you our current selection of properties and advise you about stamp duty and other aspects of your house purchase. 

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