Stamp Duty Land Tax Explained: Rates, Thresholds and First-Time Buyer Relief
Stamp Duty Land Tax is paid on property purchases in England and Northern Ireland above £125,000 (£300,000 for first-time buyers), in bands from 2% to 12%, within 14 days of completion. The rates have been unchanged since 1 April 2025.
Key points
- No SDLT is due on the first £125,000 of a home; the bands above that are 2%, 5%, 10% and 12%, and they have applied since 1 April 2025.
- First-time buyers pay nothing up to £300,000 and 5% on the portion to £500,000; a purchase above £500,000 gets no relief at all.
- Buying an additional home adds 5 percentage points to every band; you can reclaim it if you sell your previous main home within three years.
- Non-UK residents pay a further 2% on residential purchases in England and Northern Ireland.
- Your solicitor files the SDLT return and pays HMRC within 14 days of completion; the Budgets of November 2025 and October 2026 left the rates unchanged.
- Wales charges Land Transaction Tax from £225,000 with no first-time buyer relief; Scotland charges Land and Buildings Transaction Tax from £145,000.
Stamp Duty Land Tax (SDLT) is the tax you pay when you buy a house, flat or land in England or Northern Ireland. For a home that will be your only property, nothing is due on the first £125,000, then 2% is charged on the portion up to £250,000, 5% up to £925,000, 10% up to £1.5 million and 12% above that. First-time buyers pay nothing up to £300,000 and 5% on the slice between £300,000 and £500,000. These rates have applied since 1 April 2025 and were left untouched by the Budgets of 26 November 2025 and 28 October 2026. This guide works through the bands with examples, first-time buyer relief, the surcharges, who files the return and when, reliefs, SDLT on leases, and how Wales and Scotland differ.
The residential rates and three worked examples
SDLT is a slice tax: each rate applies only to the part of the price that falls within its band, never to the whole price. The bands for a buyer who will own one home are:
- Up to £125,000: 0%
- £125,001 to £250,000: 2%
- £250,001 to £925,000: 5%
- £925,001 to £1.5 million: 10%
- Above £1.5 million: 12%
Example one: a home mover buys a house for £295,000. The first £125,000 is free, the next £125,000 is taxed at 2% (£2,500) and the remaining £45,000 at 5% (£2,250), so the bill is £4,750.
Example two: a couple sell a flat and buy a house for £650,000 as their only home. They pay nothing on £125,000, £2,500 on the next £125,000 and 5% on the £400,000 above £250,000 (£20,000), a total of £22,500.
Example three: a buyer pays £1.2 million. The bill is £2,500 on the second band, £33,750 (5% of £675,000) on the third and £27,500 (10% of £275,000) on the fourth, which comes to £63,750.
HMRC publishes a calculator on GOV.UK, and your conveyancer confirms the figure before exchange. The tax is charged on the chargeable consideration, which is normally the price but also includes anything else given for the property, such as a debt you take over. Removable items such as curtains can be priced separately and left out, but the split must be realistic, because HMRC challenges inflated figures.
First-time buyer relief
If you, and everyone buying with you, have never owned a residential property anywhere in the world, and you intend to live in the property as your main home, you can claim first-time buyer relief: no SDLT up to £300,000 and 5% on the portion from £300,001 to £500,000. If the price is more than £500,000 the relief disappears entirely and the standard rates apply to the whole price.
A first-time buyer paying £350,000 therefore pays £2,500 (5% of the £50,000 above £300,000), against £7,500 for a home mover. At £510,000 the relief is lost and the bill is the full £15,500, so a price just above the cap costs far more than one just below it.
Having inherited a share of a property, or owned a home abroad, counts as previous ownership and removes the relief for everyone in the purchase. Buyers of shared ownership homes can claim it if they elect to pay SDLT on the full market value up front. Between 23 September 2022 and 31 March 2025 the relief ran to £425,000 with a £625,000 cap; those figures still appear on older websites and are wrong today.
Surcharges for additional homes and non-resident buyers
The 5% additional property surcharge and how to reclaim it
If buying a property means you will own two or more residential properties worth £40,000 or more at the end of the day of completion, the higher rates apply: 5 percentage points are added to every band, including the first £125,000. The surcharge rose from 3% to 5% on 31 October 2024. A £295,000 buy-to-let or second home therefore costs £19,500 in SDLT rather than £4,750. Married couples and civil partners are treated as one unit, so a property owned by your spouse counts as yours, and companies pay the higher rates on every residential purchase.
Replacing your main home is different. If you buy a new main residence before selling the old one, you pay the higher rates on completion, but you can reclaim the extra 5% if you sell or give away the previous main home within three years. The claim is made to HMRC within 12 months of the sale of the old home or 12 months of the filing date of the return for the new one, whichever is later. If the old main home has already gone when you complete, the surcharge does not apply at all, even if you keep other property such as a buy-to-let. Schemes that promise to avoid the surcharge generally fail, and HMRC pursues the buyer for the tax, interest and penalties.
The 2% non-resident surcharge
Since 1 April 2021, buyers who are not UK resident for SDLT purposes pay an extra 2% on residential purchases in England and Northern Ireland, on top of the standard or higher rates. You are non-resident for this test if you were not present in the UK for at least 183 days in the 12 months before completion. All joint buyers must pass the test, with special rules for spouses and civil partners. A buyer who goes on to meet the 183-day test in the year after completion can usually apply for a refund of the 2%.
Who pays, when, and what happens if you are late
The buyer pays SDLT. In practice your conveyancing solicitor or licensed conveyancer collects the money from you before completion along with the balance of the price, files the SDLT return with HMRC and pays the tax within 14 days of the effective date, which is normally completion. HMRC then issues an SDLT5 certificate, which HM Land Registry needs to register you as owner. A return is usually required even when no tax is due, for example on a first-time buyer purchase under £300,000.
The penalties for a late return are £100 if it is up to three months late and £200 after that, plus interest on late-paid tax and, where the return is more than 12 months late, a further penalty based on the tax due. The solicitor's charge for preparing the return often appears as a separate line on the completion statement; how much it costs in legal fees to buy a house lists the other disbursements that sit alongside it, and how long conveyancing takes shows where completion falls in the process.
Reliefs, exemptions and the end of multiple dwellings relief
No SDLT is payable on property left to you in a will, on a gift with no mortgage attached, or on most transfers between spouses and civil partners on divorce or dissolution. If you take over a share of a mortgage when a property is transferred to you, the debt you assume counts as consideration and can create a liability even though no money changes hands.
Multiple dwellings relief, which let buyers of two or more dwellings in one deal average the price per dwelling, was abolished for purchases completing on or after 1 June 2024, with transitional protection only for contracts exchanged on or before 6 March 2024. Buyers of six or more dwellings in a single transaction can still choose the non-residential rates instead. Reliefs remain for charities, registered social landlords, certain company reorganisations and house builders taking a home in part exchange. Mixed-use property, such as a shop with a flat above, is taxed at the non-residential rates, which start at £150,000.
SDLT on leases
Buying a leasehold flat is taxed like a freehold: SDLT is charged on the price at the residential rates above. On the grant of a brand-new residential lease there is an extra charge of 1% on any amount by which the net present value of the rent over the whole term exceeds £125,000; with new ground rents now fixed at a peppercorn, this rarely bites. Commercial leases are often caught: the net present value of the rent is taxed at 1% between £150,001 and £5 million and 2% above, and any premium at the non-residential rates, as set out in commercial leases explained.
Budget 2026 also confirmed a technical fix for renters. Rent under assured tenancies in England is being taken out of SDLT with effect from 1 May 2026, the date on which fixed-term tenancies became periodic under the Renters' Rights Act 2025, through the Finance Bill that follows the Budget, so ordinary tenants do not build up an SDLT liability as a periodic tenancy rolls on.
Budget 2025, Budget 2026 and the devolved taxes
Neither the Autumn Budget of 26 November 2025 nor the Budget of 28 October 2026 changed SDLT rates, thresholds or first-time buyer relief. Other housing measures announced do not alter what you pay on completion: a High Value Council Tax Surcharge on homes worth £2 million or more, payable by owners from April 2028 at between £2,500 and £7,500 a year; further rises in income tax on rental income from April 2027; a Your First Home equity-loan scheme for first-time buyers of new-build homes, with the first loans expected in spring 2027; a cut in the Lifetime ISA withdrawal charge to 20% from 29 October 2026 for first homes above the £450,000 cap; and a First Time Buyer ISA to replace the Lifetime ISA for new savers from April 2029. Check the Treasury's Budget documents on GOV.UK for the detail before relying on any of them.
Wales has charged Land Transaction Tax (LTT), administered by the Welsh Revenue Authority, instead of SDLT since 1 April 2018. The main residential rates are 0% up to £225,000, 6% from £225,001 to £400,000, 7.5% to £750,000, 10% to £1.5 million and 12% above, with no first-time buyer relief. Higher rates for additional properties start at 5% on the first £180,000 and rise to 17%. The main bands date from 10 October 2022 and the higher rates from 11 December 2024.
Scotland charges Land and Buildings Transaction Tax (LBTT), collected by Revenue Scotland. Residential rates are 0% up to £145,000, 2% to £250,000, 5% to £325,000, 10% to £750,000 and 12% above, unchanged since 2021; first-time buyers get a nil-rate band of £175,000, worth up to £600; and the Additional Dwelling Supplement on second homes and buy-to-lets is 8% of the whole price for purchases of £40,000 or more, up from 6% on 5 December 2024.
Getting the figure right and what to do next
SDLT is rarely a reason to instruct a solicitor on its own, because your conveyancer handles the return as part of the purchase. Specialist advice earns its fee in borderline cases: whether a property with land or an annexe is mixed-use, whether everyone qualifies as a first-time buyer, how the surcharge applies to separating couples or trustees, and how to time a sale and purchase so a refund claim is available. Ask your conveyancer to set out the SDLT calculation in writing before exchange and to explain any relief claimed; you, not the solicitor, are liable if HMRC later disagrees.
For a conveyancer, compare quotes from property solicitors in Bristol, browse property firms in Nottingham or read the property solicitors guide to see what the service includes. What conveyancing involves explains the stages, and if you are buying a flat, leasehold vs freehold sets out what to check about the lease before you commit.
Frequently asked questions
Do first-time buyers pay stamp duty in 2026?
Only above £300,000. A first-time buyer in England or Northern Ireland pays nothing on a home costing up to £300,000, 5% on the portion between £300,001 and £500,000, and the full standard rates if the price exceeds £500,000. Everyone buying must qualify, the property must be intended as your main home, and the relief is claimed on the SDLT return your solicitor files after completion.
Can I add stamp duty to my mortgage?
Not directly. SDLT must be paid to HMRC within 14 days of completion, so the money has to be available on the day. Some lenders will lend a larger amount if the loan-to-value ratio allows, which frees up cash for the tax, but the tax itself cannot be deferred or paid in instalments, and the lender will usually want to see that you have budgeted for it before issuing the offer.
Do I pay the 5% surcharge if my partner already owns a property?
If you are married or in a civil partnership, yes: you are treated as one buyer, so your spouse's property counts as yours unless the purchase replaces your shared main home. Unmarried couples are assessed individually, but if either joint buyer will own another property at the end of the day of completion, the higher rates apply to the whole purchase. A sale of the previous main home within three years allows a refund.
How do I claim back the extra stamp duty after selling my old home?
Apply to HMRC online or by post once the previous main residence has been sold, giving details of both transactions and the SDLT return reference. The claim must be made within 12 months of the sale or 12 months of the filing date of the return for the new home, whichever is later. Your conveyancer can do it for you, usually for a small fee, and HMRC repays the 5% element with interest.
Is stamp duty the same in Wales and Scotland?
No. SDLT applies only in England and Northern Ireland. Wales charges Land Transaction Tax, with a nil-rate band of £225,000 and no first-time buyer relief, and Scotland charges Land and Buildings Transaction Tax, with a nil-rate band of £145,000 (£175,000 for first-time buyers) and an 8% Additional Dwelling Supplement. Each tax has its own return and its own tax authority.
Do I pay stamp duty if I inherit a house or receive it as a gift?
No, because there is no chargeable consideration. An inheritance or an outright gift of a property with no mortgage attracts no SDLT and usually no return. The position changes if you take on a mortgage or pay anything for the property: the debt assumed or the sum paid is treated as the price, and if it exceeds £125,000 (or the £40,000 threshold where the higher rates apply) tax is due.
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This guide describes the law in England and Northern Ireland as at 30 October 2026. It is general information, not legal advice about your situation; the law and the figures it quotes change, so check the position with a solicitor before acting. LawFirms.co.uk is a directory and does not provide legal services.