Stamp duty changes in April 2025: a landlord's guide

In April 2025, the UK government introduced significant SDLT changes, including a new 7% rate on second home purchases.

This can mean you end up spending thousands of pounds more in tax on any home you’re buying – whether it’s to rent out, or to purchase as an investment. 

Below, we’re covering the key things to know as a landlord (whether you’re buying or selling up) about the changes in stamp duty, and how it affects you.

What is Stamp Duty?

As a reminder – stamp duty is the tax you’ll pay on buying a home or land over a certain value in England or Northern Ireland. 

Specifically, it’s when you do any of the following:

• buy a freehold property

• buy a new or existing leasehold

• buy a property through a shared ownership scheme

• take on a mortgage or buy a share in a house

How has Stamp Duty changed since April 2025?

Starting April 1, 2025, stamp duty rates increased for many buyers. The tax-free threshold for residential purchases dropped from £250,000 back down to £125,000, and the surcharge on second homes and buy-to-let properties rose from 3% to 5%. In practice, this means landlords now pay SDLT on lower-value properties that previously weren’t taxed and at higher rates.

Under the new system, second homes and additional properties are taxed as follows​:

• 5% on the portion up to £125,000

• 7% on £125,001 to £250,000

• 10% on £250,001 to £925,000

• 15% on £925,001 to £1.5 million

• 17% on any value above £1.5 million

How much more will you pay?

Since April, the tax-free threshold for residential purchases dropped from £250,000 back down to £125,000, and the surcharge on second homes and buy-to-let properties rose from 3% to 5%. In practice, this means landlords now pay SDLT on lower-value properties that previously weren’t taxed and at higher rates.

The stamp duty you owe on an additional property is calculated based on the below:

For example, purchasing a £300,000 second home now incurs a £20,000 SDLT bill. Under the previous rules, the same purchase would have cost £17,500 in tax. So you’re forced to pay an extra £2,500 from this month onwards.

Anyone buying an additional property can expect a higher upfront tax bill now than they would have last year.

Does the Stamp Duty hike apply to commercial properties?

No, the April 2025 SDLT changes do not affect commercial properties. The increased rates and adjusted thresholds specifically target residential property transactions. Commercial properties, including offices, retail spaces, and other non-residential real estate, continue to be subject to their existing SDLT rates, which remain unchanged.​

Does the Stamp Duty hike apply to land purchases?

Whether you pay stamp duty depends on the nature of the land:​

Residential Land: Yes, if the land is intended for residential development or use, the new SDLT rates apply. Purchasing such land is treated similarly to buying residential property, and the updated thresholds and rates are applicable.​

Non-Residential Land: No, if the land is designated for commercial use, such as agricultural or industrial purposes, the SDLT rates remain as they were prior to April 2025. These transactions are not affected by the recent changes.​

Actionable tips for landlords navigating the new SDLT rules

Dealing with higher costs when buying an additional residential property is a sudden pain for a lot of people looking to expand their portfolio right now. But we have a few actionable steps you can take to try and work through this sudden increase in cost.

1. Plan for a bigger upfront bill

Stamp duty is now a bigger slice of the buying cost for landlords. If you’re purchasing a second home or rental property, factor in the 7% SDLT rate early. Speak to your broker or solicitor upfront and request an accurate SDLT estimate before you make an offer. If you’re close to a price band threshold, even a small discount can shave thousands off your bill, so don’t be afraid to negotiate hard.

2. Time your transactions carefully

If you’re upsizing or moving investments, aim to sell your current property before you buy. This way, you avoid the higher second home rate altogether. 

Even if you buy a second home, if you buy it to move into within three years to replace your main residence, you can claim tax relief on SDLT if you sell your first home within three years.

So if you must buy first, keep a clear 36-month window in mind to qualify for a refund. And set a calendar reminder to apply for the SDLT reclaim within 12 months of your sale, otherwise, you could miss out entirely.

3. Adjust your strategy for stronger margins

Don’t rush into a deal that doesn’t stack up under the new rates. Use the SDLT hike as a prompt to revisit your investment model. Look at lower-priced properties with better yields, explore up-and-coming areas, or consider joint ventures to split costs. You might even delay your purchase and use that time to build up a larger deposit.

Conclusion

The April 2025 stamp duty hike marks a significant shift for landlords and second-time buyers. And with higher rates and lower thresholds, planning and strategy are more important than ever. 

While commercial and non-residential land purchases remain unaffected, residential investments now carry steeper upfront costs. With the right tools and timing, landlords can still find success under the new rules.

P.S. If you have any more questions about SDLT and how much you may need to pay as a landlord, try downloading our rental app today. August Intelligence is designed as a smart assistant to help small landlords make property management effortless, and answer any questions you have related to your homes. You can even scan in your property documents for information tailored to your specific wants and needs.

Disclaimer: This article is a guide and not intended to be relied upon as legal or professional advice, or as a substitute for it. August does not accept any liability for any errors, omissions or misstatements contained in this article. Always speak to a suitably qualified professional if you require specific advice or information.