Stamp Duty Land Tax — SDLT for short — is the tax you pay when buying a property or piece of land in England and Northern Ireland above a certain price. Scotland has its own version called Land and Buildings Transaction Tax (LBTT), and Wales uses Land Transaction Tax (LTT). They all work slightly differently, so this guide focuses on the English and Northern Irish system.
Current SDLT rates
SDLT works on a tiered basis, a bit like income tax. You only pay the higher rate on the portion of the price that falls within each band, not on the whole amount. The current thresholds are:
- Up to £250,000 — 0%
- £250,001 to £925,000 — 5%
- £925,001 to £1,500,000 — 10%
- Over £1,500,000 — 12%
So if you buy a house for £350,000, you pay nothing on the first £250,000 and 5% on the remaining £100,000 — that's £5,000 in stamp duty. People often assume they'd pay 5% on the entire £350,000, but that's not how it works.
First-time buyer relief
If you're buying your first home, you get a more generous nil-rate band. First-time buyers pay no SDLT on the first £425,000, then 5% on the portion between £425,001 and £625,000. If the property costs more than £625,000, you lose the relief entirely and pay standard rates.
This means a first-time buyer purchasing at £500,000 would pay £3,750 in stamp duty (5% on £75,000), compared to £12,500 under standard rates. That's a meaningful saving when you're already stretching for a deposit.
The additional property surcharge
Buying a second home or a buy-to-let? You'll pay an extra 5% on top of the standard rates across all bands. This surcharge was increased from 3% to 5% in the Autumn 2024 Budget. So a £300,000 buy-to-let purchase would attract £17,500 in SDLT (£15,000 surcharge on the full amount plus £2,500 standard duty on the £50,000 above £250,000).
There are some exceptions. If you're replacing your main residence — say you're buying a new home before selling the old one — you can claim a refund of the surcharge within three years of the purchase, provided you sell the previous property.
When do you pay?
SDLT must be paid within 14 days of completion. Your solicitor or conveyancer normally handles this as part of the transaction, submitting the return to HMRC and paying the tax from the funds you've provided. If you miss the deadline, HMRC can charge interest and penalties.
Exemptions and reliefs
A few situations where you won't pay SDLT or can claim relief:
- Transfers between spouses or civil partners (usually exempt)
- Properties left to you in a will
- Properties transferred in a divorce settlement by court order
- Purchases under £250,000 (or £425,000 for first-time buyers)
There's also Multiple Dwellings Relief for people buying more than one property in a single transaction, though HMRC has been tightening the rules on this after widespread abuse.
Using HMRC's stamp duty calculator
The simplest way to work out your bill is to use HMRC's official stamp duty calculator on GOV.UK. You enter the purchase price, confirm whether it's a first home or additional property, and it gives you the exact figure. No need for spreadsheets — though it's worth sense-checking the result against the band thresholds above.
Planning your purchase
Stamp duty is a transaction cost that buyers often underestimate. On a £500,000 purchase, you could be looking at anywhere from £3,750 (first-time buyer) to £27,500 (additional property). Factor it into your budget from the start, alongside solicitor fees, survey costs, and removal expenses. Your mortgage lender won't include it in the loan amount — stamp duty always comes from your own pocket.