On April 1, Stamp Duty Land Tax (SDLT) is set to undergo significant changes impacting first-time buyers, those moving homes and those purchasing additional properties across Northern Ireland.
The nil-rate threshold for standard residential purchases will decrease from £250,000 to £125,000 — which means buyers will start paying SDLT on properties valued over £125,000, as opposed to the current £250,000 threshold.
Understanding the new system can help homeowners make informed decisions about their purchases.
What are the new rates?
• 0% on the first £125,000
• 2% on the portion from £125,001 to £250,000
•5% on the portion from £250,001 to £925,000
•10% on the portion from £925,001 to £1.5 million
•12% on any remaining amount above £1.5 million
For example, in April 2025 you buy a house for £295,000. The SDLT you owe will be calculated as follows:
•0% on the first £125,000 = £0
•2% on the second £125,000 = £2,500
•5% on the final £45,000 = £2,250
•total SDLT = £4,750
How will this affect first-time buyers?
The nil-rate threshold for first-time buyers will drop from £425,000 to £300,000. First-time buyers purchasing properties between £300,000 and £425,000 will now be subject to SDLT, from which they were previously exempt.
For example, a first-time buyer purchasing a property for £450,000 will see their SDLT bill increase from £1,250 to £7,500.
The maximum purchase price for which first-time buyers relief can be claimed will decrease from £625,000 to £500,000, which means for properties over £500,000, first-time buyers will pay a higher stamp duty rate.
How will it affect those buying additional properties?
The rates for those buying second or additional homes will also change:
•5% on the first £125,000 (previously up to £250,000)
•7% on the portion from £125,001 to £250,000 (new band)
•10% on the portion from £250,001 to £925,000
•15% on the portion from £925,001 to £1.5 million
•17% on any remaining amount above £1.5 million
Why are the changes in stamp duty taking place?
The adjustments are a rollback of measures introduced in September 2022 by former prime minister Liz Truss’s “mini-Budget”. The aim was to support the market and those hoping to get onto the housing ladder.
The government announced these changes in their October 2024 Budget.
What impact will it have on the market?
Increased activity: There may be a surge in property transactions in the first three months of 2025 as buyers rush to complete purchases before the new rates take effect.
Increased tax burden: It’s estimated that 83% of homebuyers will pay more stamp duty from April 2025, up from 49% under the current system.
Slower house price growth: Zoopla’s analysis suggests that the SDLT changes could slow house price growth by up to 1%.
How can I plan ahead?
Timing: Aim to complete property purchases before March 31, 2025, to benefit from the current rates.
Ask for help: Speak with financial advisors or solicitors to understand how these changes affect you.
Use SDLT calculators: Many financial institutions and property websites offer updated SDLT calculators that account for the 2025 changes.
Be aware of budget: Factor in the increased SDLT costs when planning your property purchase, especially if you’re a first-time buyer or looking at properties in the £125,000 to £250,000 range.