Lets talk stamp duty

Stamp Duty: Where We Were, Where We Are Now, and Why It Changed

Whether you’re buying your first home, moving to a new one, or adding to your portfolio with a buy-to-let, stamp duty affects us all. And since the changes that came into force in April 2025, it’s become even more painful. Let’s take a look at where we were, where we are now, and why.

Where We Were

Back in September 2022, the government introduced temporary cuts to Stamp Duty Land Tax (SDLT) to boost the housing market. These measures raised the nil-rate threshold — the portion of a property’s value on which no tax is paid — from £125,000 to £250,000.

For first-time buyers, the relief was even more generous: they paid no tax on the first £425,000 (up from £300,000), and paid reduced rates up to £625,000.

The surcharge for additional properties, such as second homes or buy-to-let investments, remained at 3% on top of standard rates.

These changes gave buyers a noticeable saving and helped fuel activity in the property market.

Where We Are Now

On 1 April 2025, those temporary cuts were rolled back, and new rules came in:

• The nil-rate threshold fell back to £125,000.
• First-time buyer relief was reduced to cover only the first £300,000, and the cap lowered to £500,000.
• The surcharge on additional properties rose from 3% to 5%, hitting investors and landlords harder.

For many buyers, this means significantly higher bills. For example, someone purchasing a £400,000 home now pays £10,000 in SDLT, compared to just £5,000 under the old rules.

Why the Rules Changed

There were three main drivers behind the increases:

• 1. Raising Revenue – Stamp duty is a major source of government income. With mounting pressure on public finances, restoring higher rates helps boost the Treasury.
• 2. Cooling the Market – The 2022 cuts increased demand and pushed prices higher. By reversing them, the government hopes to ease competition and slow house price growth.
• 3. Fairness – The bigger surcharge on second homes and buy-to-lets was designed to give first-time buyers a better chance and reduce speculative property investment.

The Bottom Line

The April 2025 changes marked a turning point. After a few years of tax relief, buyers are now facing a harsher stamp duty regime. Whether this stabilises the market or simply makes it harder for people to move remains to be seen, but one thing is clear: stamp duty is once again one of the most painful parts of buying property in England.