Property Tax Changes From 1 April 2025
Stamp Duty Land Tax (SDLT)
Currently, in England and Northern Ireland, buyers pay no Stamp Duty Land Tax (SDLT) on homes worth less than £250,000. However, different property taxes apply in Scotland and Wales. The government doubled the standard threshold from £125,000 to £250,000 in September 2022. First-time buyers also saw their threshold increase from £300,000 to £425,000. These temporary higher thresholds will end on 31 March 2025, when they are expected to revert to previous levels.
Starting on 1 April 2025, significant changes to Stamp Duty Land Tax (SDLT) will affect property buyers in England and Northern Ireland. Here’s what you need to know:
New SDLT Rates:
- 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%
Example: For a property purchased at £295,000, the SDLT would be calculated as follows:
- 0% on the first £125,000 = £0
- 2% on the next £125,000 = £2,500
- 5% on the remaining £45,000 = £2,250
- Total SDLT: £4,750
First-Time Buyer Relief
First-time buyers will benefit from a reduced SDLT rate:
- Up to £300,000: 0%
- £300,001 to £500,000: 5%
Properties purchased above £500,000 are not eligible for this relief.
Example: For a first-time buyer purchasing a property at £500,000:
- 0% on the first £300,000 = £0
- 5% on the remaining £200,000 = £10,000
- Total SDLT: £10,000
Higher rates for additional properties
The surcharge rate for additional properties – called Higher Rates for Additional Dwellings (HRAD) has increased from 3% to 5% from 31 October 2024. This means that it is an extra 5% on top of standard SDLT. You will not pay the extra 5% SDLT if both of the following apply:
- your previous main residence was sold within 36 months of completing your new purchase
- the property you’re buying is replacing your main residence
Capital Gains Tax (CGT)
Capital Gains Tax (CGT) applies to the profit someone makes when they sell certain assets, known as chargeable assets, including property.
However, homeowners will usually qualify for Private Residence Relief when they sell their main home, provided they meet the relevant conditions. These include having grounds of less than 5,000 sqm and not renting out or using any part of the property exclusively for business.
In contrast, selling a property, that is not the owner’s main home may result in a CGT liability. This can include buy-to-let properties, second homes and some land, or inherited property. For more detailed information, GOV.UK’s Capital Gains Tax guidance provides the latest rules and requirements.
The CGT rates for residential property will stay the same, at 18% and 24%, while the rates for the sale of other types of assets, including commercial property, are being increased to match the residential thresholds.
Business rates
In England and Wales, business rates apply to most non-domestic properties, including shops, offices, warehouses, and holiday rentals.
The small business rate multiplier (a number used to calculate business rate bills) will be frozen at 49.9p in 2025 and 2026. There was no confirmation of the large business rate multiplier in the Autumn Budget.
The current 75% business rates discount will expire in April 2025. The government will replace it with a 40% discount for eligible retail, hospitality and leisure (RHL) properties in England, up to a maximum of £110,000. The rules for rate reliefs are different in Wales, Scotland and Northern Ireland.
