Stamp Duty Increase from 1st April

Wed 19 Feb 2025

The Government is expected to get a £1.1 billion cash bonus when Stamp Duty rates increase and more homebuyers are dragged into the tax net says Zoopla’s Director Richard Donnell.

Zoopla’s figures show, that from the 1st of April 2025, four in every five buyers will pay Stamp Duty when purchasing a main residence. That’s up from the current 49%, as the 2% rate between £125,000 and £250,000 returns.

Less than a fifth of buyers (17%) will then pay no Stamp Duty on purchases below £125,000.

Another 49% of buyers making purchases of over £250,000 will pay an extra £2,500 in Stamp Duty and 33% of those purchasing between £125,000 and £250,000 will pay 2% on the purchase price, up to a maximum of £2,500.

The biggest jump in buyers paying the duty will be in the West Midlands where 66% more sales will be dragged into paying the tax from April, followed by 55% in the East Midlands and 50% in the North West.

First-time buyers will be hard hit, too, especially in the South, where 34% more will have to pay it and 30% more in London.

Stamp Duty has become a big source of tax revenue, approaching £10bn a year for the government. The reduction in tax reliefs from April will see more home buyers paying Stamp Duty.

Existing homeowners will pay up to £2,500 MORE for each purchase across a large number of sales. The average seller has made £60,000 in capital gains so there is flexibility to absorb this cost but buyers will expect to factor this extra cost into what they offer.

It is positive that most first-time buyers will still pay no Stamp Duty from April, but these changes hit those buying over £300,000 in southern England the most where buying costs are already high. This will reduce buying power and market activity at a local level.

Stamp Duty is a big tax on home movers in southern England where affordability problems are already a major challenge. The case for reforming Stamp Duty remains but the question is where to replace the multi-billion in annual tax revenues.

London and the South East are the two most expensive regions in England to buy a house, and April’s changes will make it harder for first-time buyers to step onto the housing ladder compared to those living in the North of England.