What Is Stamp Duty Land Tax (SDLT)?
Stamp Duty Land Tax is a tax you pay when purchasing property or land in England and Northern Ireland above a certain price threshold. It is administered by HMRC and is one of the largest upfront costs involved in buying a home. The amount you pay depends on the purchase price, whether you are a first-time buyer, and whether you already own another property.
If you are buying in Scotland, you pay Land and Buildings Transaction Tax (LBTT) instead. In Wales, the equivalent is Land Transaction Tax (LTT).
Current SDLT Rates for 2025/26
SDLT is calculated on a slice system — you only pay each rate on the portion of the purchase price that falls within that band:
Standard Residential Rates
| Purchase Price Band | SDLT Rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001 – £250,000 | 2% |
| £250,001 – £925,000 | 5% |
| £925,001 – £1,500,000 | 10% |
| Over £1,500,000 | 12% |
First-Time Buyer Rates
First-time buyers benefit from a more generous nil-rate band on properties up to £625,000:
| Purchase Price Band | SDLT Rate |
|---|---|
| Up to £425,000 | 0% |
| £425,001 – £625,000 | 5% |
If the purchase price exceeds £625,000, first-time buyer relief is not available and the standard rates apply to the entire property price.
Additional Property Surcharge
If you are buying a second home, a buy-to-let property, or any additional residential property, an extra 5% surcharge is added to each SDLT band. This applies to the entire purchase price from the first pound.
Non-UK Resident Surcharge
Buyers who are not UK residents pay an additional 2% surcharge on top of the applicable SDLT rates (including the additional property surcharge, if relevant).
How Stamp Duty Is Calculated
SDLT uses a progressive slice system, similar to income tax. You do not pay the higher rate on the entire purchase price — only on the portion within each band.
Example: Buying a £350,000 Home (Standard Rates)
| Band | Amount in Band | Rate | SDLT Due |
|---|---|---|---|
| £0 – £125,000 | £125,000 | 0% | £0 |
| £125,001 – £250,000 | £125,000 | 2% | £2,500 |
| £250,001 – £350,000 | £100,000 | 5% | £5,000 |
| Total | £7,500 |
Example: First-Time Buyer at £350,000
A first-time buyer purchasing at £350,000 pays £0 in stamp duty, since the entire price falls within the £425,000 nil-rate threshold.
Example: Additional Property at £350,000
| Band | Amount in Band | Rate (incl. 5% surcharge) | SDLT Due |
|---|---|---|---|
| £0 – £125,000 | £125,000 | 5% | £6,250 |
| £125,001 – £250,000 | £125,000 | 7% | £8,750 |
| £250,001 – £350,000 | £100,000 | 10% | £10,000 |
| Total | £25,000 |
The difference is substantial. Stamp duty on a buy-to-let mortgage property is a significant upfront cost that should be factored into your investment calculations.
Understanding the Key SDLT Reliefs
First-Time Buyer Relief
To qualify as a first-time buyer for SDLT purposes, you must never have owned or had an interest in a residential property anywhere in the world. Both purchasers must qualify if buying jointly. The relief saves up to £6,250 compared to standard rates.
Replacing Your Main Residence
If you are buying a new main home but have not yet sold your previous one, you may initially pay the additional property surcharge. You can claim a refund from HMRC if you sell your former main residence within three years of buying the new property.
Multiple Dwellings Relief
This relief was abolished from 1 June 2024. Properties purchased after this date no longer qualify for multiple dwellings relief.
Planning for Stamp Duty Costs
SDLT is a significant cost when budgeting for a property purchase. Consider the following:
- Factor SDLT into your total budget — alongside your deposit, legal fees, surveys, and moving costs.
- First-time buyers should check eligibility — the relief can save thousands and may influence your choice of property price.
- Additional property buyers should account for the 5% surcharge — on a £300,000 property, this adds £15,000 to the standard SDLT bill.
- Consider timing — SDLT rates and thresholds can change at Budget announcements. Check the latest HMRC guidance before committing to a purchase.
- Check your mortgage affordability — ensuring you have sufficient funds for both your deposit and stamp duty.
How to Pay Stamp Duty
Your solicitor or conveyancer submits an SDLT return and pays the tax on your behalf as part of the completion process. Payment must be made to HMRC within 14 days of completion. Late payment may incur interest and penalties.
You do not need to submit an SDLT return if the property is below £40,000.
Frequently Asked Questions
Answers to common SDLT questions are provided in the FAQ section above. For the most up-to-date rates and reliefs, consult the official HMRC guidance on Stamp Duty Land Tax.