Stamp Duty Guide: Rates, Exemptions & How to Calculate

The Complete UK Stamp Duty Guide for 2025/26

Stamp Duty Land Tax (SDLT) is a tax you pay when buying property or land in England and Northern Ireland above a certain price. Scotland and Wales have their own systems. This guide covers every aspect you need to know.

Current SDLT Rates (England & Northern Ireland) — 2025/26

From 1 April 2025, the standard residential rates are:

| 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% |

SDLT is calculated on a slice basis — you only pay each rate on the portion of the price within that band.

First-Time Buyer Relief

First-time buyers pay no SDLT on the first £300,000 of a property costing up to £500,000. The portion between £300,001 and £500,000 is taxed at 5%. If the property costs more than £500,000, the relief is lost entirely and standard rates apply.

Example — FTB purchasing at £425,000:

• First £300,000: £0
• £300,001–£425,000 (£125,000 at 5%): £6,250
• Total SDLT: £6,250 (saving of £6,250 compared to standard rates)

To qualify, none of the purchasers can have previously owned a property anywhere in the world, including inherited property.

Second Home & Buy-to-Let Surcharge

If you are buying an additional residential property (second home, buy-to-let, holiday home), you pay a 5% surcharge on top of every band (increased from 3% in October 2024). This applies from the first pound if the purchase price is £40,000 or more.

Example — Second home at £350,000:

• Up to £125,000 at 5%: £6,250
• £125,001–£250,000 at 7%: £8,750
• £250,001–£350,000 at 10%: £10,000
• Total SDLT: £25,000

You can reclaim the surcharge if you sell your previous main home within 3 years of buying the new one.

Company Purchases

Companies buying residential property above £500,000 pay a flat 17% rate on the entire purchase price (the 15% rate plus 2% surcharge). This is designed to discourage corporate ownership of high-value residential property. There are reliefs for property rental businesses, developers, and property traders.

Scottish LBTT Rates (2025/26)

Scotland uses Land and Buildings Transaction Tax:

| Band | Rate | |---|---| | Up to £145,000 | 0% | | £145,001 – £250,000 | 2% | | £250,001 – £325,000 | 5% | | £325,001 – £750,000 | 10% | | Over £750,000 | 12% |

The Additional Dwelling Supplement (ADS) in Scotland is 8% on the total price for second homes.

Welsh LTT Rates (2025/26)

Wales uses Land Transaction Tax:

| Band | Rate | |---|---| | Up to £225,000 | 0% | | £225,001 – £400,000 | 6% | | £400,001 – £750,000 | 7.5% | | £750,001 – £1,500,000 | 10% | | Over £1,500,000 | 12% |

Wales does not offer first-time buyer relief. The higher-rate surcharge for additional properties is 5% on the entire price.

Worked Examples (Standard Rates — England)

Property at £250,000:

• Up to £125,000 at 0%: £0
• £125,001–£250,000 at 2%: £2,500
• Total: £2,500

Property at £350,000:

• Up to £125,000 at 0%: £0
• £125,001–£250,000 at 2%: £2,500
• £250,001–£350,000 at 5%: £5,000
• Total: £7,500

Property at £500,000:

• Up to £125,000 at 0%: £0
• £125,001–£250,000 at 2%: £2,500
• £250,001–£500,000 at 5%: £12,500
• Total: £15,000

Property at £750,000:

• Up to £125,000 at 0%: £0
• £125,001–£250,000 at 2%: £2,500
• £250,001–£750,000 at 5%: £25,000
• Total: £27,500

Stamp Duty on Shared Ownership

You have two options when buying through shared ownership:

1. Pay SDLT on the share you're buying — You pay on just your share (e.g., 40% of £300,000 = £120,000). However, when you staircase (buy more shares), you pay SDLT again each time.
2. Market value election — Pay SDLT on the full market value upfront. No further SDLT when you staircase. This is often better if you plan to staircase to full ownership.

Transfers Between Spouses and Civil Partners

Transfers of property between spouses or civil partners are exempt from SDLT provided:

• The couple are not separating or divorcing under a court order, or
• The transfer is made as part of a divorce settlement

This means adding your spouse to the deeds or transferring ownership within a marriage attracts no tax.

SDLT Refunds

You may be entitled to a refund in several situations:

• Selling a previous main home within 3 years of buying a new one — reclaim the 5% surcharge
• Property price reduced after completion (e.g., due to defects discovered)
• Transaction falls through after tax was paid
• Multiple Dwellings Relief (abolished April 2024 but claims can still be made for transactions before that date)

Refund claims must be made within 12 months of the filing date or 12 months of the event giving rise to the refund, whichever is later.

Mixed-Use Property Relief

If a property has both residential and non-residential elements (for example, a flat above a shop), it may qualify as mixed-use. Non-residential SDLT rates are significantly lower:

| Band | Rate | |---|---| | Up to £150,000 | 0% | | £150,001 – £250,000 | 2% | | Over £250,000 | 5% |

Additionally, the second-home surcharge does not apply to mixed-use purchases. However, HMRC scrutinises mixed-use claims closely — ensure the non-residential element is genuine and substantial.

Tips to Reduce Your Stamp Duty Bill

1. Check if you qualify as a first-time buyer — The savings can be significant (up to £11,250).
2. Negotiate the purchase price — Even small reductions near band thresholds save money. Dropping from £250,001 to £250,000 saves £2,500 at standard rates.
3. Separate fixtures and fittings — Items like carpets, curtains, and freestanding appliances can legitimately be excluded from the property price. Ask the seller to provide a fixtures list with fair values.
4. Consider timing — If rates or thresholds are due to change, timing your completion can make a difference.
5. Sell before you buy — Avoid the 5% surcharge by completing the sale of your current property before (or on the same day as) purchasing the new one.
6. Explore mixed-use classification — If the property genuinely has a non-residential element, the lower rates apply.
7. Transfer between spouses — Use the spousal exemption to restructure ownership tax-free before a sale.

Paying and Filing

SDLT must be filed and paid within 14 days of completion. Your solicitor normally handles this as part of the conveyancing process. Late filing attracts automatic penalties (£100 initially, rising to £200 after 3 months) plus interest on unpaid tax.

Use our Stamp Duty Calculator to work out exactly what you will owe on your purchase.

SDLT for Non-Residents

Since April 2021, non-UK residents purchasing residential property in England and Northern Ireland pay a 2% surcharge on top of the standard rates. This applies even if it is the buyer's only property. Combined with the second-home surcharge, a non-resident buying an additional property pays the standard rate plus 5% plus 2% — a total surcharge of 7% on each band.

Non-resident means spending fewer than 183 days in the UK in the 12 months around the purchase. If you subsequently become UK-resident within the relevant period, you can reclaim the 2% surcharge.

SDLT and Lease Premiums

When you buy a leasehold property, SDLT may be payable on both the purchase price and the net present value (NPV) of the ground rent payments. For most residential leasehold purchases with modest ground rents, the SDLT on rent is nil or minimal. However, for long leases with substantial rents (more common in commercial property), the SDLT on rent can be significant.

Since the Leasehold Reform (Ground Rent) Act 2022, ground rents on new long leases are restricted to a peppercorn (zero financial rent), meaning this is primarily an issue for older leases.

Planning for Property Investors

Property investors should consider the following SDLT strategies:

Incorporation relief — Transferring a portfolio of properties into a limited company may qualify for incorporation relief under Section 162 TCGA 1992, potentially avoiding SDLT on the transfer. This is complex and requires professional advice, but can be beneficial for landlords with multiple properties.

Multiple Dwellings Relief (MDR) — Although abolished for transactions completing on or after 1 June 2024, claims can still be made for earlier transactions. MDR allowed the SDLT to be calculated on the average price per dwelling rather than the total price, often resulting in significant savings.

Purchase of six or more dwellings — Buying six or more residential properties in a single transaction is treated as a non-residential purchase, attracting the lower non-residential SDLT rates. The second-home surcharge does not apply.

Historical SDLT Threshold Changes

Understanding how thresholds have changed helps explain the current system:

• Before September 2022: Standard nil-rate threshold of £125,000; FTB relief on first £300,000 for properties up to £500,000
• September 2022 – March 2025: Temporary increase to £250,000 standard; FTB relief on first £425,000 for properties up to £625,000
• From April 2025: Reverted to £125,000 standard; FTB relief on first £300,000 for properties up to £500,000

The October 2024 Autumn Budget increased the second-home surcharge from 3% to 5%.

Frequently Asked Questions

Can I avoid stamp duty by paying below the threshold? You only avoid stamp duty if the total consideration (including any works or contributions) is below the nil-rate band. HMRC can challenge artificially low purchase prices.

Is SDLT payable on new builds? Yes, at the same rates. Some developers offer "stamp duty paid" incentives, but this is a marketing cost factored into the price.

What about buying with someone who already owns a property? If any buyer already owns a property, the higher rates apply to the whole purchase. The only exception is if they are replacing their main residence and sell within 3 years.

Do I pay SDLT on auction purchases? Yes. The effective date is when the hammer falls, and the 14-day filing deadline runs from completion.