Stamp duty changes explained as UK households hit with £3,229 bill overnight

Homebuyers in England will pay £3,229 more in from April 2025 for an average property, one expert warns.

From this month, will start paying stamp duty on properties sold for over £125,000, the previous threshold had been £250,000. This means a home in England selling for an average of £291,397 will pay stamp duty of £4,569, £3,229 more than if the property had been sold before April 1.

Stamp duty is taxed at between 2%, 5%, 10% or and 12% of a property's purchase price, with different rates applying the more expensive a property is.

Until 31 March the 2% rate only applied to houses sold for over £250,000.

Coventry Building Society pointed out the last time the 2% rate of stamp duty was on property that sold for £125,000 was in 2015 when the average in England was £191,986, which would produce a 2% stamp duty tax bill of £1,340.

Jonathan Stinton, head of mortgage relations at Coventry Building Society, said: "Reverting to the 2014 thresholds is a major step backwards, given that house prices have soared over the past decade. The thresholds simply aren't in sync with current property values.

"For buyers, this means additional costs at a time when affordability is already stretched. The government should consider updating the thresholds to reflect inflation and house price growth or risk further distortions in the housing market and a real squeeze on prospective homebuyers."

The rate of stamp duty has fluctuated over the last 11 years. From 2014- 2020 rates were the same as now but during the pandemic a stamp duty holiday applied to properties selling for £500,000 or under.

The threshold was reduced to £250,000 in July 2021 and then in October 2021 the second band was removed, meaning property had to be £250,000 or over before stamp duty was owed.

A survey of UK homeowners by Barratt Homes also found that 36% are unaware of the exact changes and how they would be affected.

Terry Higgins, mortgage expert and Group MD of TNHG New Build Mortgages, said: "The upcoming changes to Stamp Duty could have a big impact on buyers, the temporary increases to thresholds that were put in place in September 2022 will come to an end impacting everyone planning to move, particularly those taking their first step on the property ladder or moving to a new home."

Stamp duty rates explained:

Up to £125,000 (£300,000 for first-time buyers unless the property is over £500,000) - 0%

£125,001 - £250,000 - 2%

£250,001 - £925,000 - 5%

£925,001 - £1,500,000 - 10%

£1,500,001 and above - 12 %

(If you buy a second property then different rates apply)