First time buyers: Get moving by March or pay £1,000s extra due to stamp duty changes

First time buyers are being urged to complete their purchase before the end of March 2025 or they could face paying thousands of pounds more due to stamp duty changes due to come into effect. In fact, some first time buyers’ bills could rocket by over £10,000. However, home movers could also face higher bills too. Here’s the latest.

Why are stamp duty bills rising?

Changes to first time buyer stamp duty relief coming into effect on 1 April 2025 will mean stamp duty bills will go up for many first time buyers.

Currently, if you’re a first time buyer, you don’t pay stamp duty on properties costing up to £425,000. You’ll then pay 5% on the portion from £425,001 to £625,000. However, there’s no tax relief on properties over £625,000 and you must pay the standard stamp duty rates.

However, from 1 April 2025, the threshold at which first time buyers must start paying stamp duty will be reduced to £300,000. You’ll then pay 5% stamp duty on the portion from £300,001 to £500,000. And if the price is over £500,000 you cannot claim the relief.

These stamp duty changes are happening because the thresholds were hiked in 2022 as a temporary measure by the government to help first time buyers but will revert to their previous levels on 1 April 2025. Read more in our guide on First time buyer stamp duty.

Rush to beat stamp duty hike has already started

Areas with the highest property values are already experiencing a rush to beat the stamp duty deadline, research by Rightmove suggests.

It found that in London, only 8% of homes for sale will be stamp duty free for first time buyers from April 2025, rising to 24% in the South East and 32% in the East of England.

These areas have seen an increase in first time buyer demand since the Autumn 2024 Budget, suggesting some buyers are rushing to avoid paying higher charges. In London, before the Budget, first time buyer demand was 28% ahead of last year – now, it is 31% ahead, the portal said.

While in the East of England, demand has increased from being 28% ahead of last year pre-Budget to 32% post Budget. And in the South East, the trend has moved from 23% growth pre-Budget to 24% post-Budget.

How much could first time buyer stamp duty changes cost me?

The amount that bills will increase due to these stamp duty changes will depend on the price of property. First time buyers in London and the South East are likely to be worst hit due to higher average property prices.

For example, the average cost of a first time buyer property in London is £411,900, according to Zoopla*. When buying a property for that amount, first time buyers would currently pay no stamp duty. But from 1 April 2025, they’d will face a stamp duty bill of £5,595.
While in the South East, the average first time buyer property costs £327,700. Currently, a first time buyer would pay no stamp duty when buying a property of this value. But from 1 April 2025, a first time buyer would face a stamp duty bill of £1,385.
But first time buyers purchasing properties between £500,000 and £625,000 will be particularly hard hit. This is because from 1 April 2025, you cannot claim tax relief on properties over £500,000. This is a reduction from the current threshold of £625,000.
For example, if a first time buyer purchases their first home for £625,000 before 31 March 2025, they’ll face a stamp duty bill of £10,000. But if they buy their first home for £625,000 after 1 April 2025, their stamp duty bill would be £21,250.