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Stamp Duty Rates in England: A Comprehensive Guide
As of April 1, 2025, the stamp duty rates in England have undergone significant changes, affecting home buyers and investors alike. Here's a breakdown of the new rates:
For Standard Home Buyers (Not First-Time Buyers):
- Up to £125,000: 0%
- £125,001 to £250,000: 2%
- £250,001 to £925,000: 5%
- £925,001 to £1.5 million: 10%
- Above £1.5 million: 12%
For First-Time Buyers:
- 0% on the first £300,000
- 5% on the portion between £300,001 and £500,000
- No relief above £500,000
For Buy-to-Let Investors and Second Home Buyers (Additional Properties):
- A surcharge of 5% applies on top of the standard rates:
- Up to £125,000: 5%
- £125,001 to £250,000: 7%
- £250,001 to £925,000: 10%
- £925,001 to £1.5 million: 15%
- Above £1.5 million: 17%
These rates represent a shift from the previous tax-free band of £250,000 for standard buyers, which has now dropped to £125,000. First-time buyer relief, however, covers up to £300,000 with a tapered rate up to £500,000.
For example, a buy-to-let property priced at £700,000 would attract stamp duty of 5% on the first £125,000, 7% on the next £125,000, and 10% on the remaining £450,000 portion. First-time buyers, on the other hand, would pay no stamp duty on the first £300,000 but would be liable for the standard rates on any portion above that, up to £500,000.
Transactions under £40,000 are not subject to stamp duty and do not require a tax return to be filed with HMRC.
The surcharge for buy-to-let and second home buyers was introduced by former Conservative Chancellor George Osborne in 2016 and was raised from 3% to 5% on October 31, 2021. This means that a buy-to-let or second home buyer pays 5% stamp duty on a £110,000 purchase, while a home mover pays no stamp duty.
It's important to note that if a first-time buyer purchases a property costing more than £500,000, they lose their exemption from stamp duty. Similarly, the 5% surcharge for buy-to-let and second home buyers applies to the entire cost of the property, including the tax-free portion for home movers and first-time buyers.
The stamp duty land tax rate for properties valued at £1.5m or more is 12%, with an additional rate of 17% for buy-to-let or second homes.
This article aims to provide a clear and concise overview of the rates of stamp duty for home purchases and the additional rates for buy-to-let and second home buyers in England, effective from April 2025.
- The new stamp duty rates in England from April 2025 will impact both standard home buyers and investors, as a 5% surcharge applies to buy-to-let and second home mortgages.
- When buying real-estate properties in England, financing options should consider the standard stamp duty rates for first-time buyers and investors, as these rates differ significantly from those of home movers.
- Investing in real estate in England can be influenced by changes in stamp duty rates, as the tax for buy-to-let or second homes valued at £1.5m or above is 17%.
