What is Stamp Duty Land Tax?

Stamp Duty Land Tax (SDLT) is a tax paid by property buyers in England and Northern Ireland on purchases above certain thresholds. It's one of the largest costs in buying property and must be paid within 14 days of completion.

The tax is calculated on a sliding scale, meaning different rates apply to different portions of the property value. Understanding these rates and available exemptions can help you plan your purchase and potentially save thousands of pounds.

Key Points

SDLT rates vary by property value, purchase type (residential/commercial), and buyer status (first-time buyer, additional property). Payment must be made within 14 days of completion, and rates change periodically with government policy.

Current SDLT Rates 2025

The current system applies different rates depending on whether you're a first-time buyer, purchasing your main residence, or buying an additional property. As of September 2025, here are the standard residential rates for England and Northern Ireland:

Property Value Band Standard Rate First-Time Buyer Rate Additional Property Rate
Up to £250,000 0% 0% 3%
£250,001 - £425,000 5% 0% (if total ≤ £625k) 8%
£425,001 - £925,000 5% 5% 8%
£925,001 - £1,500,000 10% 10% 13%
Over £1,500,000 12% 12% 15%

Key changes in 2025: The standard rate bands have been adjusted, with the 5% rate now extending to £925,000 (previously £625,000), providing significant savings for mid-range property purchases. First-time buyer relief remains at £425,000 threshold, offering up to £8,750 in savings. Use our stamp duty calculator for instant calculations.

Stamp Duty Calculator

Calculate Your Stamp Duty

Enter your property details to calculate the exact SDLT you'll need to pay

How to Use the Calculator

Exemptions & Reliefs

First-Time Buyer Relief

First-time buyers receive significant SDLT relief, potentially saving thousands on their first home purchase. The relief applies to properties up to £625,000 with partial relief available.

Full Relief

Properties up to £425,000: No SDLT payable for first-time buyers. This can save up to £6,250 compared to standard rates.

Partial Relief

Properties £425,001-£625,000: Standard rate applies only to amount above £425,000, providing substantial savings.

Joint Purchases

All buyers must be first-time buyers. If one buyer previously owned property, relief doesn't apply.

Other Available Reliefs

Eligibility Tip

Always check your eligibility for reliefs before completing your purchase. Many buyers miss out on legitimate savings by not claiming available reliefs.

Payment Process & Deadlines

When to Pay

The SDLT Return Process

  1. Complete SDLT Return: Form submitted online by solicitor
  2. Calculate Tax Due: Based on property value and buyer circumstances
  3. Submit Payment: Electronic payment through HMRC system
  4. Receive Certificate: SDLT5 certificate needed for Land Registry
  5. Register Property: Land Registry registration using SDLT certificate

Required Information

Important Deadline

Missing the 14-day deadline results in automatic penalties and interest charges. Ensure your solicitor is aware of the deadline and has sufficient funds to complete payment on time.

Additional Property Surcharge

What Counts as Additional Property?

The 3% additional property surcharge applies to purchases where the buyer already owns another residential property worth £40,000 or more anywhere in the world.

Potential Refunds

You may be eligible for a refund of the additional property surcharge if you sell your previous main residence within 36 months of the new purchase.

Planning Strategy

If possible, consider timing your purchase and sale to avoid the additional property surcharge. Sometimes delaying completion by a few days can save thousands in SDLT.

Regional Variations

Scotland - Land and Buildings Transaction Tax (LBTT)

Scotland has its own property transaction tax with different rates and thresholds:

Wales - Land Transaction Tax (LTT)

Wales operates its own system with these rates:

Northern Ireland

Northern Ireland follows the same SDLT system as England, with identical rates and thresholds.

Strategies to Reduce SDLT

Legal Methods to Minimize Tax

Chattels Strategy

Items like furniture, carpets, and white goods can be valued separately from the property, potentially reducing the SDLT liability on the property element.

Compliance Warning

All SDLT reduction strategies must be legitimate and well-documented. HMRC investigates suspicious transactions and can impose penalties for tax avoidance schemes.

Real-World SDLT Calculation Examples

Understanding how stamp duty is calculated in practice helps you budget accurately and identify potential savings. Here are detailed examples covering common scenarios:

Example 1: First-Time Buyer - £350,000 Property

Calculation Breakdown

Property Value: £350,000
Buyer Status: First-time buyer
SDLT Calculation:

  • £0 - £425,000: 0% = £0

Total SDLT: £0 (saving £5,000 vs standard rate)
This first-time buyer pays no stamp duty, saving £5,000 compared to a standard purchase. The relief applies because the property is under £425,000. Use our first-time buyer calculator to check your eligibility and savings.

Example 2: Standard Purchase - £500,000 Property

Calculation Breakdown

Property Value: £500,000
Buyer Status: Standard (not first-time buyer)
SDLT Calculation:

  • £0 - £250,000: 0% = £0
  • £250,001 - £500,000: 5% = £12,500

Total SDLT: £12,500 (2.5% effective rate)
This represents 2.5% of the property value. The tiered system means you only pay 5% on the portion above £250,000, not on the entire property value. Check your affordability including stamp duty costs.

Example 3: Additional Property - £300,000 Buy-to-Let

Calculation Breakdown

Property Value: £300,000
Buyer Status: Additional property (buy-to-let)
SDLT Calculation:

  • £0 - £250,000: 3% = £7,500
  • £250,001 - £300,000: 8% = £4,000

Total SDLT: £11,500 (3.83% effective rate)
The 3% surcharge applies to all bands, significantly increasing the tax burden. Without the surcharge, this would be £2,500. If you're replacing your main residence, you can reclaim the surcharge within 3 years of selling your old property.

Example 4: High-Value Property - £1.2 Million

Calculation Breakdown

Property Value: £1,200,000
Buyer Status: Standard purchase
SDLT Calculation:

  • £0 - £250,000: 0% = £0
  • £250,001 - £925,000: 5% = £33,750
  • £925,001 - £1,200,000: 10% = £27,500

Total SDLT: £61,250 (5.1% effective rate)
High-value properties face substantial stamp duty bills. If this were an additional property, add £36,000 (3% of £1.2m) for a total of £97,250. Accurate budgeting is essential - use our deposit calculator to plan total upfront costs.

Comparing Scenarios: £425,000 vs £426,000 (First-Time Buyer)

This comparison illustrates the importance of threshold awareness:

For first-time buyers near the £425,000 threshold, staying just below can save thousands. If you're at £426,000, negotiating down to £425,000 saves £8,850 in stamp duty - a powerful negotiating tool.

SDLT Refunds and Reliefs You May Not Know About

3-Year Surcharge Refund for Main Residence Replacement

If you paid the 3% additional property surcharge when buying a new main residence before selling your old one, you can claim a full refund if you sell the old property within 3 years. This provides crucial flexibility for those in property chains or needing to secure their new home first.

Refund Process

Eligibility: Sold old main residence within 3 years of purchasing new one
Deadline: Claim within 12 months of selling old property
Method: Amend your SDLT return through HMRC online service
Refund Time: Typically 4-6 weeks after claim submission
Amount: Full 3% surcharge refunded (can be £9,000+ on a £300,000 property)

Multiple Dwellings Relief (MDR)

When purchasing multiple residential properties in a single transaction (e.g., a block of flats or several houses), you may qualify for Multiple Dwellings Relief. This calculates stamp duty based on the average property value rather than the total purchase price, potentially saving thousands.

Mixed-Use Property Relief

Properties with both residential and commercial elements (e.g., flat above a shop, farm with farmhouse) may qualify for non-residential rates, which are generally lower than residential rates and don't include the 3% additional property surcharge.

Mixed-Use Caution

HMRC scrutinizes mixed-use claims intensively. The commercial element must be substantial and genuine. A small home office doesn't qualify. Seek professional advice before claiming mixed-use status, as incorrect claims can result in penalties and interest charges.

Shared Ownership SDLT

Shared ownership schemes offer two SDLT payment options:

Use our shared ownership calculator to compare both options and determine which saves you more.

Common SDLT Mistakes That Cost Thousands

1. Missing the 14-Day Deadline

The Mistake: Failing to pay SDLT within 14 days of completion
The Cost: Immediate interest charges at 3% above Bank of England base rate, plus penalties from £100 to £400+
The Fix: Ensure your solicitor has sufficient funds at completion and is aware of the deadline. Set a reminder for day 10 to confirm payment has been made.

2. Incorrect First-Time Buyer Claims

The Mistake: Claiming first-time buyer relief when ineligible (e.g., previously owned inherited property, partner not a first-time buyer)
The Cost: Full SDLT due plus interest and potential penalties
The Fix: Carefully review eligibility criteria. If you've ever owned property anywhere in the world (including inherited), you're not a first-time buyer. Both partners must be first-time buyers for joint purchases.

3. Overvaluing Chattels

The Mistake: Allocating unrealistic values to furniture and fittings to reduce SDLT
The Cost: HMRC challenges, penalties, interest, and reputational damage
The Fix: Keep chattels valuations reasonable and supported by evidence (receipts, valuations, photographs). £5,000-£10,000 is typically acceptable for furnished properties; £50,000 will trigger scrutiny.

4. Forgetting About the Surcharge Refund

The Mistake: Paying the 3% surcharge when replacing your main residence and forgetting to claim the refund after selling your old property
The Cost: Losing £9,000+ in refundable tax (on a £300,000 property)
The Fix: Set a calendar reminder for 12 months before the 3-year deadline. Claim the refund as soon as you sell your old property - don't wait until the last minute.

5. Not Considering Timing Around Thresholds

The Mistake: Completing purchases just above key thresholds without considering negotiation
The Cost: Thousands in unnecessary SDLT (e.g., £426,000 vs £425,000 = £8,850 difference for first-time buyers)
The Fix: Be aware of thresholds (£250,000, £425,000, £925,000, £1.5m). If you're close, negotiate with the seller or consider allocating more to chattels to stay below the threshold.

6. Assuming Scotland and Wales Have Same Rates

The Mistake: Using England/NI SDLT rates for Scottish or Welsh properties
The Cost: Incorrect budgeting and potential cash flow issues at completion
The Fix: Scotland uses LBTT (different rates and thresholds), Wales uses LTT (different rates and thresholds). Always check which system applies to your property location.

Frequently Asked Questions

Frequently Asked Questions

Do I need to pay SDLT on a £200,000 property?

For a standard purchase, no SDLT is due on properties up to £250,000 - you pay £0. For additional properties (buy-to-let, second homes), the 3% surcharge applies from the first pound, so you'd pay £6,000 (3% of £200,000). First-time buyers also pay £0 on properties up to £425,000, making this an excellent price point for first-time buyers.

Can couples split property ownership to reduce SDLT?

HMRC looks at the substance of transactions, not just the legal form. Artificial arrangements designed solely to avoid SDLT may be challenged and result in penalties. However, genuine joint ownership reflects normal property purchase patterns and is perfectly acceptable. If one partner owns property and the other doesn't, the first-time buyer relief won't apply to a joint purchase - both must be first-time buyers.

What happens if I miss the 14-day deadline?

Late payment penalties apply immediately: interest charges at 3% above Bank of England base rate start accruing from day 15, plus fixed penalties of £100 (30 days late), £200 (6 months late), and potentially more for longer delays. You'll also face difficulties registering the property with the Land Registry, which can delay your legal ownership and cause issues with mortgage lenders. Always ensure your solicitor has sufficient funds and is aware of the deadline.

Do I pay SDLT on exchange or completion?

SDLT is due within 14 days of completion, not exchange. The tax is calculated based on the completion date and your circumstances at that time. This means if you exchange contracts in December but complete in January, the January rates and thresholds apply. The 14-day clock starts ticking from the completion date, so plan your finances accordingly.

How much can I save with first-time buyer relief?

First-time buyer relief can save up to £8,750 on properties up to £625,000. On a £425,000 property, you save £8,750 (paying £0 instead of £8,750). On a £500,000 property, you save £8,750 (paying £3,750 instead of £12,500). On properties above £625,000, no relief applies and you pay standard rates on the entire value. This makes the £425,000 threshold particularly attractive for first-time buyers.

Can I claim SDLT relief on a new build property?

Yes, first-time buyer relief applies to new build properties just as it does to existing properties, provided you meet all eligibility criteria (never owned property before, purchasing your main residence, property value ≤ £625,000 for any relief). New builds don't have special SDLT rates, but some developers offer incentives that can help cover stamp duty costs. Be aware that incentives may affect the property's market value for SDLT purposes.

What's the difference between SDLT, LBTT, and LTT?

SDLT (Stamp Duty Land Tax) applies in England and Northern Ireland with rates of 0%-12%. LBTT (Land and Buildings Transaction Tax) applies in Scotland with rates of 0%-12% but different thresholds (nil rate up to £145,000). LTT (Land Transaction Tax) applies in Wales with rates of 0%-12% and different thresholds (nil rate up to £225,000). Scotland and Wales also have higher additional property surcharges (6% and 4% respectively vs 3% in England/NI). Always check which system applies to your property location.

Can I get a mortgage that includes stamp duty?

Most lenders don't allow you to borrow stamp duty as part of your mortgage - it must be paid from your own funds at completion. However, some specialist lenders offer "gifted deposit" schemes where family contributions can cover stamp duty, or you might use a personal loan (though this affects affordability calculations). The best approach is to save for stamp duty alongside your deposit. Use our deposit calculator to plan total upfront costs including SDLT, legal fees, and surveys.

Complex Scenarios

Some property transactions involve unique circumstances that affect SDLT calculations:

For complex scenarios, always consult a qualified solicitor or tax advisor to ensure correct SDLT treatment and avoid costly mistakes.