How to reduce stamp duty
Changes to Stamp Duty Land Tax (SDLT) in England and Northern Ireland came into effect on 1 April 2025, making buying or moving home more expensive for many.
While you might not be able to avoid paying stamp duty altogether, we’ve put together 6 savvy ways you could reduce stamp duty costs.
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Author - Aidan Darrall Editor - Helen Lovell
Last reviewed on 15th April 2025
What are the stamp duty changes?
The thresholds for how much a property can be worth before both home movers and first-time buyers have to pay stamp duty were changed in April 2025. The government also increased the additional amount homeowners pay when buying a second property back in October 2024.
Old stamp duty charges | Current stamp duty charges |
|---|---|
Buyers of homes worth less than £125,000 were exempt from paying stamp duty | Buyers of homes worth less than £250,000 are exempt from paying stamp duty |
For first-time buyers, the property value limit for buying a first home without paying stamp duty was £300,000 | For first-time buyers, the property value limit for buying a first home without paying stamp duty is £425,000 |
First-time buyers weren’t eligible for any stamp duty relief if their home was worth more than £625,000 | First-time buyers won’t be eligible for any stamp duty relief if their home is worth more than £500,000 |
Those buying a second property in addition to one they already own had to pay an extra 3% on properties worth up to £125,000 with higher rates for higher-value properties | Those buying a second property in addition to one they already own must pay an extra 5% on properties worth up to £125,000 with higher rates for higher-value properties |
For more information about stamp duty, and what property buyers must pay in other areas of the UK, read our stamp duty guide.
6 ways to reduce stamp duty charges
1. Make an offer just below the threshold
If you’re buying a property priced around a stamp duty threshold, make an offer that falls just below it to make some shrewd cost savings.
Homebuyers should pay close attention to the £500,000 first-time buyer threshold in particular as buyers won’t be eligible for any stamp duty relief if the property is worth more than this. To save on costs, try to make an offer below £500,000. By paying £499,999 instead of £506,706 (the average price of a starter home in London) you could save a whopping £5,336 in stamp duty charges alone.
2. Negotiate with your seller
While the responsibility to pay stamp duty ultimately lies with you, the buyer, your seller may be willing to slightly reduce the cost of their property in order to share some of the financial burden.
Of course, you’ll be relying on the goodwill of the seller here - and you probably won’t be able to strike a deal if you’re buying a property with lots of interest. But it’s well worth asking the question if your seller is looking to move quickly and you’re in a good position to negotiate.
3. Take advantage of new build benefits
Those looking at new build properties should consider haggling with the developer, as many companies offer perks and incentives for new build home buyers. They may very well offer to pay your stamp duty for you - which could save you thousands.
4. Keep any extras separate
Stamp duty is calculated based on the total price you pay for the property. So, if any extras are rolled into the overall property price, you’ll naturally end up paying more SDLT.
Instead, see if you can deduct any chattels (such as carpets, curtains, free-standing furniture or appliances) from the total cost.
You may still want to buy these items as part of the sale, of course. If your seller is willing to part with them, simply agree an amount and subtract it from the property purchase price. You may then need to pay for these items separately.
This can be tricky to negotiate and must be done on a ‘just and reasonable basis’ so it’s a good idea to work closely with your solicitor or conveyancer to ensure this process is carried out legally and fairly.
5. Get a stamp duty refund if you’re eligible for one
There are some instances where you’ll be able to claim back stamp duty. For example, if you sell your additional property within three years of purchasing it.
This can be particularly useful to know if you’re temporarily buying a second home - maybe you’re trying to buy and sell simultaneously but can’t quite make the timings work, or you’re temporarily buying accommodation for a family member.
6. Think outside the box
Most homeowners will opt to buy a standard residential property but, if you really are determined to bring your stamp duty charges down, you could consider something a little different.
For example, buying land and building your own home could save you stamp duty liability, as you’d only have to pay tax on the value of the land. Another option could be buying commercial property to convert into a residential space as you’d pay lower non-residential Stamp Duty Land Tax. It’s obvious that these options are particularly extreme, though, and shouldn’t seriously be considered if you’re just looking to reduce stamp duty costs.
Some homeowners also believe that they may be able to reclaim SDLT payments if their home is deemed ‘uninhabitable’. However, this exemption is only applicable to a very small number of buildings and it’s likely not even worth considering purchasing this kind of property solely to avoid a stamp duty bill. For more information, read HMRC’s article on the topic of uninhabitable dwellings.
“Many home buyers understandably look for ways to reduce costs when moving house, but it’s extremely important to pay the correct amount of stamp duty if you owe it. Trying to find loopholes can cause trouble with HMRC later down the line so always take the advice of a qualified solicitor.”
Luke Hollingdale, Mortgage Expert
FAQs
Yes, some lenders will allow you to add stamp duty to your overall mortgage amount. While this might feel like an immediate financial relief, keep in mind that you’ll incur interest on the amount over the duration of the mortgage term.
Any stamp duty added to your mortgage balance will be taken into consideration when calculating your loan-to-value (LTV) amount, too, which could impact your affordability. And if it pushes you into a higher loan-to-value bracket, you may not be able to access the more competitive rates that usually apply to lower LTV mortgages.
Stamp duty rules can be complex, so it’s worth speaking to your solicitor or conveyancer if you believe you might be eligible for exemption.
The HMRC website also provides guidance on who might be eligible for exemption.
In only very specific circumstances. For example, if you inherit a mortgage-free house in someone’s will, stamp duty likely won’t apply. You also won’t need to pay stamp duty if you’re transferring ownership or half ownership of a residential property to a civil partner or spouse following a separation.
If you buy a property with a spouse or civil partner, you’ll be treated as if you are buying a home together - even if it’s just one of you completing the transaction.
If you’re buying a property with someone you’re not married to, such as a friend or relative, the stamp duty rules apply to each person. So, for example, if one of you is a first-time buyer but the other isn’t, you won’t be eligible for any first-time buyer relief. And if one of you already owns a property, the 5% stamp duty surcharge will likely apply.
It’s likely the stamp duty threshold changes will impact the wider housing market, and therefore house prices, at least in the short term.
That’s because the market saw a rush of buyers trying to complete their move before the stamp duty deadline. Now the changes have officially come into play, demand may naturally lower, which could cause house prices to drop. Whether house prices will fall significantly, and how long the trend will last, remains to be seen.
Keep an eye on Zoopla’s House Price Index for up-to-date information on property prices.
If you are eligible to pay stamp duty, it’s likely the changes will impact the total cost of moving home or buying for the first time. So it’s important to work out the costs and add it to your total budget, to make sure you can afford the difference.
Our stamp duty research shows that the average home mover in London, for example, will see a rise of £2,500. First-time buyers will be hit even harder, with a staggering increase of £11,250. The average stamp duty costs will increase from £3,854 to £15,104 on a new home worth £502,098 (such a huge increase is because home buyers are no longer eligible for first-time buyer relief on properties worth over £500,000).