Stamp Duty Land Tax Explained: How Much Will You Pay When Buying a Home in the UK?
When you buy a property in England or Northern Ireland, you'll almost certainly face Stamp Duty Land Tax (SDLT). It's one of the largest single costs of buying a home, often running into thousands - or even tens of thousands - of pounds.
The rules changed significantly in April 2025, when temporary reliefs introduced in 2022 came to an end. That means many buyers are now paying more stamp duty than they were previously.
This guide explains exactly how stamp duty works in 2025/26, what the rates are, who gets relief, and how to work out what you'll owe before you buy.
Use our free Stamp Duty Calculator to get an instant, accurate estimate for any property purchase.
What Is Stamp Duty Land Tax?
SDLT is a tax you pay to the government when you buy a property or land in England or Northern Ireland. Scotland has its own version called Land and Buildings Transaction Tax (LBTT), and Wales has Land Transaction Tax (LTT).
You pay SDLT within 14 days of completing your property purchase. Your solicitor or conveyancer typically handles the payment on your behalf as part of the purchase process.
Stamp duty is calculated on the purchase price of the property - and critically, it applies in bands (similar to income tax), so you only pay the higher rate on the portion of the price that falls within each band.
Stamp Duty Rates for Standard Residential Purchases (2025/26)
From 1 April 2025, the standard rates for residential property purchases are:
| Purchase Price | 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% |
Important: These are marginal rates, not flat rates. You only pay each rate on the portion of the price in that band.
Example - buying a home for £300,000:
- On the first £125,000: £0 (0%)
- On the next £125,000 (£125,001–£250,000): £2,500 (2%)
- On the remaining £50,000 (£250,001–£300,000): £2,500 (5%)
- Total SDLT: £5,000
First-Time Buyer Relief
First-time buyers get a discount on stamp duty, subject to conditions.
For purchases completed from 1 April 2025:
| Purchase Price | First-Time Buyer Rate |
|---|---|
| Up to £300,000 | 0% |
| £300,001 – £500,000 | 5% (on the portion above £300,000) |
| Over £500,000 | Standard rates apply (no relief) |
Example - first-time buyer purchasing for £425,000:
- On the first £300,000: £0 (0%)
- On the next £125,000 (£300,001–£425,000): £6,250 (5%)
- Total SDLT: £6,250
Without first-time buyer relief, the same purchase would cost £11,250 in stamp duty - so the saving is £5,000.
To qualify for first-time buyer relief:
- You must be buying your first ever residential property
- All buyers on the mortgage/title must be first-time buyers (if you're buying with someone who has owned before, neither of you can claim the relief)
- The property must be your main residence
- The purchase price must be £500,000 or less
The 3% Surcharge for Additional Properties
If you already own a residential property and you're buying another one, a 3% surcharge applies on top of the standard rates. This applies to:
- Buy-to-let landlords buying a rental property
- People buying a holiday home or second home
- Property investors adding to a portfolio
The 3% surcharge applies to the full purchase price, including the bands where the standard rate is 0%.
Example - landlord buying a £200,000 buy-to-let:
Standard rates without surcharge:
- £125,000 at 0%: £0
- £75,000 at 2%: £1,500
- Standard total: £1,500
With the 3% surcharge:
- £200,000 at 3% extra: £6,000
- Total SDLT: £7,500
Use our Stamp Duty Calculator to calculate surcharge scenarios quickly and accurately.
The Higher Rate for Non-UK Residents
Non-UK residents buying residential property in England or Northern Ireland pay an additional 2% surcharge on top of all other rates. This was introduced in April 2021 and continues to apply.
This surcharge can apply even to UK nationals who have been living abroad for more than 183 days in the 12 months before purchase.
Corporate Bodies and Higher Rate on Certain Transactions
Companies buying residential property worth more than £500,000 face the higher rates for additional dwellings, plus potentially the Annual Tax on Enveloped Dwellings (ATED). This is a specialist area - always seek professional advice if buying through a company.
Replacing Your Main Residence
If you sell your main home and buy a new one on the same day (or have already sold it and are buying a replacement), you generally pay standard SDLT rates - not the 3% surcharge - even if you temporarily own two properties.
If you buy your new home before selling your old one, you may have to pay the 3% surcharge upfront. But if you sell your previous main home within 36 months of completing the new purchase, HMRC will refund the surcharge.
This refund isn't automatic - you need to claim it through HMRC within 12 months of selling your old home.
What's Exempt from Stamp Duty?
Some transactions are exempt from SDLT or treated differently:
- Properties under £40,000: No SDLT regardless of circumstances
- Transfers between spouses or civil partners: Usually no SDLT on transfers as part of a separation or divorce
- Inherited properties: No SDLT on property you inherit
- Gifts: No SDLT if property is gifted with no mortgage (if you take on a mortgage, SDLT applies to the mortgage value)
- Freehold and leasehold transfers: Different rules apply to leasehold properties - particularly new leases with high ground rents
The Impact of the April 2025 Changes
In September 2022, the government raised thresholds temporarily - the zero-rate band was increased to £250,000 (from £125,000), and first-time buyer relief was extended to £625,000. These temporary reliefs expired on 31 March 2025.
From 1 April 2025, the old thresholds returned. This means:
- Non-first-time buyers are paying more on properties between £125,000 and £250,000 (now 2% instead of 0%)
- First-time buyers face a lower relief cap (£300,000 instead of £425,000 with 0% rate, and the upper limit for relief dropped from £625,000 to £500,000)
Many buyers who were planning to purchase hurried to complete before 31 March 2025 to take advantage of the better rates. If you're buying now, these are the rates you're working with.
Stamp Duty vs. Scotland and Wales
If you're buying in Scotland, you pay Land and Buildings Transaction Tax (LBTT) instead of SDLT. The rates and bands are different from England's.
If you're buying in Wales, you pay Land Transaction Tax (LTT). Again, rates and bands differ.
Our Stamp Duty Calculator covers SDLT for England and Northern Ireland. For Scotland and Wales, check the Revenue Scotland and Welsh Revenue Authority websites respectively.
How Stamp Duty Affects Your Budget
Stamp duty must be paid from your own funds - lenders won't add it to your mortgage in most circumstances. This means you need to have the money available at completion, on top of your deposit and other purchase costs.
This is easy to overlook when budgeting, particularly for first-time buyers. Make sure your purchase plan accounts for SDLT from the start.
A rough guide to SDLT for common price points (England, 2025/26):
| Property Price | Standard SDLT | First-Time Buyer SDLT |
|---|---|---|
| £200,000 | £1,500 | £0 |
| £300,000 | £5,000 | £0 |
| £400,000 | £10,000 | £5,000 |
| £500,000 | £15,000 | £10,000 |
| £600,000 | £20,000 | £20,000 (no relief) |
| £800,000 | £30,000 | £30,000 (no relief) |
| £1,000,000 | £43,750 | £43,750 (no relief) |
Tips to Minimise Your Stamp Duty Bill
Negotiate on fixtures and fittings. You can pay a separate, agreed price for items like carpets, curtains, and white goods. These are not subject to SDLT, so allocating some value here reduces the property price for SDLT purposes. However, this must be done transparently and at fair market value - HMRC scrutinises large apportionments.
Use a solicitor experienced in SDLT. Some property types and circumstances qualify for exemptions or reliefs that aren't widely known. A knowledgeable solicitor can advise whether any apply to your purchase.
Claim any refunds promptly. If you overpay SDLT (for example, because you paid the surcharge and then sold your previous home within 36 months), claim the refund as soon as possible rather than letting it lapse.
For landlords: consider timing. If you're buying multiple properties at once, there are specific relief provisions (multiple dwellings relief was abolished in 2024, so always check current rules with a professional).
Frequently Asked Questions
Do I pay stamp duty when remortgaging? No. SDLT only applies when you buy a property, not when you remortgage your existing one.
What if I buy with someone who already owns a property? If any buyer on the transaction already owns a residential property, the 3% surcharge applies to the entire purchase - even if one buyer is a first-time buyer. You'd also lose first-time buyer relief.
Can I pay stamp duty in instalments? No. SDLT must be paid in full within 14 days of completion. Your solicitor handles this and will include it in the funds needed on completion day.
How do I know if I qualify for any reliefs? Your solicitor or conveyancer will assess this as part of the purchase process. But you can also use our Stamp Duty Calculator to see what applies to your situation.
Is stamp duty tax-deductible for landlords? No, SDLT is not tax-deductible against rental income. However, it can be added to the base cost of the property for Capital Gains Tax purposes when you eventually sell.
Final Thoughts
Stamp duty is a significant cost that can catch buyers off guard if they haven't planned for it. Understanding the rates, reliefs, and surcharges before you start house hunting means you can budget properly from day one - and avoid any nasty surprises at completion.
👉 Use our free Stamp Duty Calculator to instantly calculate what you'll owe on any property - including buy-to-let surcharges and first-time buyer relief.
This article reflects SDLT rates and rules for England and Northern Ireland from 1 April 2025. It is for educational purposes only and does not constitute tax or legal advice. Stamp duty rules are complex and change over time - always consult your solicitor for advice specific to your purchase.