Changes to stamp duty and Land Transaction Tax (LTT) will take effect from April 2025, impacting first-time buyers, home movers, and property investors in Wales. With a lower threshold for exemptions and higher surcharges on second homes, buyers must be aware of the potential financial implications and act accordingly before the changes come into force. 

What’s changing in April 2025? 

The Welsh Government has adjusted LTT thresholds, aligning with broader UK fiscal policies. Key updates include: 

• Lower exemption for first-time buyers – The stamp duty-free threshold will drop from £425,000 to £300,000. Any property priced above this will incur stamp duty charges. 

• Increased surcharge for second homes – The additional tax on second homes and buy-to-let properties will rise from 3% to 5%, making investment purchases more expensive. 

How first-time buyers will be affected 

Buyers purchasing homes below £300,000 will still pay no stamp duty, but those looking at higher-priced properties will now face additional costs. Many first-time buyers are looking to complete purchases before April 2025 to avoid the extra tax burden. Government incentives and mortgage schemes could still help ease affordability concerns, but higher upfront costs may deter some buyers. 

Impact on second home buyers and investors 

The higher surcharge on second homes aims to deter multiple property ownership and free up housing for local buyers. Investors will pay more upfront when acquiring rental properties, which could slow down buy-to-let growth in Wales. Those looking to expand property portfolios may accelerate purchases before the April deadline. 

Market reactions and buyer strategies 

The announcement of these changes has led to a surge in property transactions, as buyers rush to complete purchases before the tax increase. Property sales in late 2024 saw the highest levels in four years, with first-time buyers and investors making last-minute decisions. Experts predict that after the April changes, demand may cool temporarily, but housing market growth will remain steady throughout 2025. 

What should buyers do next? 

First-time buyers should assess their budgets and options to determine whether they should buy before April 2025 or wait. Investors and second-home buyers must factor in higher upfront costs, making early purchases more financially viable. Speaking to a mortgage advisor can help navigate the best options for securing a property in a changing tax landscape. 

Get expert advice on navigating the new stamp duty rules today