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The amount of tax you may need to pay when buying a house has increased in 2025. We look at what’s happening, when, and how much it could cost you.
KEY INFORMATION
The tax you’ll pay to His Majesty’s Revenue and Customs (HMRC) when buying a house is called Stamp Duty Land Tax. How much you’ll have to pay depends on:
Stamp duty changes that came into force on 1 April 2025 mean stamp duty bills will increase for many homebuyers in England and Northern Ireland. This is because the threshold at which you start paying stamp duty has been reduced from £250,000 to £125,000.
| Purchase price | Stamp duty rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001 to £250,000 | 2% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1.5 million | 10% |
| Over £1.5 million | 12% |
If you buy a house for £300,000 in England or Northern Ireland, your stamp duty bill will be £5,000. This assumes you’re a UK resident buying a home to live in and you’re not a first time buyer.
| Property price | LTT rate |
|---|---|
| Up to £225,000 | 0% |
| £225,001 up to £400,000 | 6% |
| £400,001 up to £750,000 | 7.5% |
| £750,001 up to £1.5 million | 10% |
| Over £1.5 million | 12% |
| Purchase price of property | Stamp duty rate |
|---|---|
| Up to £145,000 | 0% |
| £145,001 to £250,000 | 2% |
| £250,001 to £325,000 | 5% |
| £325,000 to £750,000 | 10% |
| Over £750,000 | 12% |
Find information in our guide Stamp Duty: Who pays it? When? And how much?
If you’re a first time buyer, you may pay less – or even no – stamp duty land tax when buying a house due to first time buyer stamp duty relief. However, stamp duty bills have increased for many first time buyers due to changes to this tax relief that came into effect in April 2025. First time buyers now pay stamp duty on properties over £300,000 rather than the previous threshold of £425,000.
| Purchase price | Stamp duty rate |
|---|---|
| Up to £300,000 | 0% |
| £300,001 to £500,000 | 5% |
For properties over £500,000 you cannot claim the relief. You’ll pay the same stamp duty rates as non-first time buyers.
Yes. If you are buying an additional property, like a second home or a Buy to Let, you will have to pay a higher rate of Stamp Duty.
And in the October 2024 Budget, the chancellor increased the extra amount you’ll have to pay on top of standard stamp duty rates from 3% to 5% in England and Northern Ireland. Find out more in our guide on Stamp Duty Land Tax for second homes.
| Purchase price | Stamp duty bill if buying your only home | Stamp duty bill if buying a second home |
|---|---|---|
| £300,000 | £5,000 | £20,000 |
While if you are a non UK resident, you will also pay a 2% surcharge on top.
Use our handy stamp duty calculator to find out instantly how much stamp duty you’ll need to pay.
Yes. If you buy your new house before selling your current one, you will need to pay the additional stamp duty rate. However, if you sell your former main home within 3 years you can apply for a refund, although time limits apply. Find more information on the HMRC website.
If you’re buying a shared ownership property and need to pay stamp duty you have two options:
If you opt to pay stamp duty in stages, you pay anything that’s due on the first purchase amount. But you then don’t make any further payments until you own more than an 80% share of the property.
You can choose which option’s best for you, depending on your circumstances. You can use HMRC’s stamp duty calculator to work out how much tax you would have to pay if you buy a shared ownership home. Read more in our guide What is shared ownership? Is it worth it?
If you receive a gifted deposit to help you buy a house from for example a parent or grandparent, you won’t need to pay any inheritance tax on it if they live for the next 7 years.
But if they die within 7 years, you may need to pay inheritance tax. When it comes to tax, it’s always advisable to get expert advice tailored to your circumstances.
You don’t have to make life’s big financial decisions alone. Get the right IFA for you today with our partners at Unbiased.
When you buy a house, you’ll need to pay council tax. The amount you’ll pay will be determined by:
You may also be able to reduce your council tax by challenging your council tax band. But it’s important to do your research carefully first. Find out more in our guide Check and challenge your council tax band in 6 easy steps.
If you’re buying a second home in England, you could face paying twice the amount of second home council tax from April 2025, under a new law. While powers enabling councils in Scotland to charge up to double the full rate of council tax on second homes came into force in April 2024.
And in April 2023, the maximum level at which local authorities in Wales could set council tax premiums on second homes and long-term empty properties increased to 300%. Find out more in our guide on Second home council tax. Check your local council’s website for more information on council tax. You can find a list of local authorities here.
No, capital gains tax only applies when you sell an asset that has increased in value since you bought it. Usually, when you sell your main home (or only home) you don’t have to pay any capital gains tax (CGT) due to private residence relief.
However, if you’re selling a Buy to Let property or second home, find out more in our guide on Capital gains tax on property when selling.
You don’t have to make life’s big financial decisions alone. Get the right IFA for you today with our partners at Unbiased.
There are a number of other costs you’ll need to budget for when buying a house including:
Find more information in our guide on The costs of buying a house.
You have to pay stamp duty within 14 days of you completing on your property. Your conveyancing solicitor usually organises the transfer of the money on your behalf.
The amount of stamp duty land tax you’ll pay when buying a house depends on the purchase price, whether you’re a first time buyer, whether it’s an additional property and if you’re a UK resident. Use our handy stamp duty calculator to find out instantly how much stamp duty you’ll need to pay.
The buyer is who pays any stamp duty due, not the seller.
HomeOwners Alliance Ltd is registered in England, company number 07861605. Information provided on HomeOwners Alliance is not intended as a recommendation or financial advice.
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