What Property Investors Need to Know
Major changes to stamp duty are set to take effect on April 1, 2025, and they could significantly impact property investors and second-home buyers. If you’re planning to expand your property portfolio, here’s what you need to know—and why acting now might save you money.
What Is Stamp Duty?
Stamp duty is a government tax that property buyers pay upon completing a purchase. It primarily affects second-home buyers and investors, with rates higher than those for first-time buyers or primary residences. The amount varies depending on the property value, with the tax applied in tiers.
For instance, under the current system:
- Properties up to £250,000 are taxed at 5% for additional property buyers.
- Properties over £250,000 and up to £925,000 are taxed at 10%.
- Rates rise further for higher property values.
For a property worth £250,000, this means a stamp duty bill of £12,500.
What’s Changing in April 2025?
From April 1, 2025, a new stamp duty band will be introduced, and the rates for properties in the lower to mid-value range will increase. Here’s how the new system compares:
Current vs. New Stamp Duty Rates for Additional Properties
For a £250,000 property, the stamp duty will rise from £12,500 to £17,500—a £5,000 increase.
Should You Act Now?
If you’re planning to invest, completing your purchase before April 2025 could save you thousands. The average property purchase in the UK takes 12–16 weeks to complete, meaning there’s still time to meet the deadline, especially if you’re buying with cash.
What If You Miss the Deadline?
If you don’t meet the April 2025 deadline, you’ll face higher upfront costs. However, property investment remains a long-term wealth-building strategy. Historically, property values in the UK have appreciated significantly over time.
Savills Research predicts a 23.4% increase in UK housing market prices over the next five years, with even higher growth expected in the North of England. For example:
- Property prices in Yorkshire and Humber are forecast to rise by 28.2%.
- A £150,000 property purchased in May 2025 could appreciate by £42,300 in five years, far outweighing the £3,000 increase in stamp duty.
While it’s wise to take advantage of the current rates if possible, higher stamp duty costs shouldn’t deter you from investing. Property remains one of the safest and most reliable long-term investments.
If you’re ready to start or expand your portfolio, now is the time to act. Take advantage of the current rates while they last and set yourself up for long-term success in the property market.
