UK Property Taxes to Rise from April 2025: What It Means for Buyers

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From April 1, 2025, the United Kingdom will introduce significant changes to its property tax system, impacting both domestic buyers and international investors. The stamp duty threshold for first-time buyers will be reduced from £425,000 (€497,250) to £300,000 (€351,000), while the general exemption level will drop from £250,000 (€292,500) to £125,000 (€146,250). These changes are expected to increase the financial burden on property transactions substantially—first-time buyers alone could face up to £34 million in additional costs.



According to the Financial Times, these reforms may cool down the housing market. Propertymark representatives argue that the changes disproportionately affect vulnerable groups, such as young buyers entering the market. Rightmove warns of a “tax cliff” effect—delays in transactions could cost buyers thousands of pounds. Bloomberg estimates that buyers in London may face up to £11,250 (€13,162) in additional charges if they miss the deadline.



Additionally, from April 6, 2025, the UK government will abolish the non-domicile tax regime, which previously allowed foreign residents to avoid taxation on overseas income. All residents who have lived in the UK for 10 years or more will now be liable for inheritance tax on their worldwide assets, The Guardian reports. While the move is intended to increase tax fairness, it may discourage foreign investment in UK real estate.

Nathan Emerson, CEO of Propertymark, noted that many buyers, particularly first-time homeowners, are frustrated by the sudden financial impact: “Delays in transaction chains often occur due to external factors, leaving those already struggling to enter the market at a further disadvantage.”

Rightmove analyst Colleen Babcock added that the new tax rules target a small but vulnerable buyer group, reflecting the imbalance in tax policy. The company has urged the government to extend current relief schemes, but no policy changes have been announced.

Meanwhile, UK home prices continue to rise. In February 2025, the average home price increased by 0.4% to £270,493 (€316,477). In January 2025, 95,110 transactions were completed—14% more than in January 2024.

However, rising prices contrast with stagnation in the construction sector. According to Knight Frank, the UK will build only half of the planned 300,000 homes in 2025 due to tighter regulations and reduced capacity in the social housing sector. While the government aims to deliver 1.5 million homes over the next five years, experts question the feasibility of this goal.

In summary, while analysts remain cautiously optimistic about the UK real estate market, the upcoming tax reform poses significant challenges for both domestic and international buyers. The full impact will become clear in the coming months.