Stamp Duty Changes for Landlords in 2025: What You Need to Know!

Big changes are coming to stamp duty for landlords and second-home buyers in 2025. If you’re planning to invest in property, it’s crucial to understand how these changes could impact your investment and why it might be wise to act before the new rates take effect.

In this newsletter, I’ll cover everything you need to know about the upcoming stamp duty changes, what they mean for you as a landlord or property investor and whether you should take action before the April 2025 deadline.

What is Stamp Duty?

Before we dive into the changes, let’s quickly recap what stamp duty is.

Stamp duty is a tax paid by property buyers upon completion of a property purchase. For second-home buyers and property investors, the rates are typically higher than for first-time buyers or those purchasing a primary residence.

Stamp duty is calculated in tiers, meaning different rates apply to different portions of the property price.

Current Stamp Duty Rates for Additional Properties (Before 1st April 2025)

If you’re buying a second property or an investment property today, here’s what you’d be paying:

For example, if you purchase a property worth ￡250,000, the stamp duty would be ￡12,500 under current rates. But all of this is set to change on April 1st, 2025.

Stamp Duty Changes from 1st April 2025

From April 2025, a new band is being introduced, specifically impacting properties in the lower to mid-value range. The new rates will be as follows:

Here’s a breakdown of what this change means:

If you’re buying a property worth ￡250,000 today, you’d pay ￡12,500 in stamp duty based on the 5% rate. But from April 1st 2025, the rate will rise to 7% for properties between ￡125,001 and ￡250,000, increasing the stamp duty to ￡17,500 - a ￡5,000 difference!

Should You Be Acting Now?

With the April 2025 deadline just a few months away, time is of the essence if you want to avoid the higher rates.

The average property purchase in the UK takes 12 to 16 weeks to complete, and it can take even longer in cases of legal issues, chain complications, or mortgage delays. If you’re buying in cash, you might be able to meet the deadline, but there’s no time to waste.

What Happens if You Miss the Deadline?

Miss the April deadline? Don’t worry, it’s not the end of the world!

While you’ll pay more in stamp duty upfront, property values typically appreciate over time. Even if you pay the higher stamp duty rate, your property’s value is likely to increase, offsetting the additional cost.

In fact, according to Savill's Research, the UK housing market is projected to grow by 23.4% over the next five years. Yorkshire and Humber, in particular, is expected to see a 28.2% rise in property values.

Let’s say you purchase a ￡150,000 property in May 2025 and pay ￡3,000 more in stamp duty. Over the next five years, that same property could gain ￡42,300 in value, far outweighing the additional tax paid upfront.

Property Investment: A Long-Term Strategy

Whether you’re able to take advantage of the current rates or miss the deadline, remember that property investment is a long-term wealth-building strategy. Property values tend to rise over time, and the benefits of appreciation will often outweigh any initial tax costs.

Conclusion: What’s Your Next Move?

If you’re considering purchasing an additional property or scaling your investment portfolio, it’s important to assess your timeline and strategy. Completing your purchase before April 2025 could save you thousands, but if that’s not possible, remember that property remains a solid long-term investment.

We are investment specialists that help clients invest in the northern property market with ease, through our end-to-end investment service. If you'd like to discuss how we can help you maximise your returns with properties with a minimum return of 10%, let's chat!

Not quite ready yet? No problem! Stay informed by joining our mailing list and we’ll send you our latest deals and exclusive insights... Click here to subscribe.