UK Stamp Duty Guide: Rates, Relief & How to Pay

Stamp Duty Land Tax (SDLT) is one of the most significant additional costs when buying a property in England or Northern Ireland. Understanding how it works, what rates apply to your purchase, and whether you qualify for any relief can save you thousands of pounds. This guide covers everything you need to know about SDLT in 2026.

How Stamp Duty Land Tax Works

SDLT is a tax charged on property and land purchases above a certain price threshold. It works on a tiered system - similar to income tax bands - where different portions of the purchase price are taxed at different rates. This means you do not pay the highest rate on the entire purchase price, only on the portion that falls within each band.

For example, if you buy a property for £400,000 as a standard buyer, you pay 0% on the first £125,000, 2% on the next £125,000 (£125,001-£250,000), and 5% on the remaining £150,000 (£250,001-£400,000), giving you a stamp duty bill of £10,000 - not 5% of the full £400,000.

SDLT applies to both freehold and leasehold purchases, and it applies whether you are buying with a mortgage or paying in cash. It does not apply to properties in Scotland (which has Land and Buildings Transaction Tax) or Wales (which has Land Transaction Tax).

Current SDLT Rate Bands (April 2026)

The following rates apply to residential property purchases in England and Northern Ireland from April 2026:

Standard Residential Rates

First-Time Buyer Rates

• 0% on the first £300,000
• 5% on the portion from £300,001 to £500,000

First-time buyer relief is only available on properties costing up to £500,000. If the property costs more than £500,000, you pay the standard residential rates on the entire purchase price with no first-time buyer relief.

Additional Property Rates

If you already own a residential property (anywhere in the world) when you complete on a new purchase, you pay higher SDLT rates across every band. The higher rates are: 5% on the first £125,000, 7% on £125,001–£250,000, 10% on £250,001–£925,000, 15% on £925,001–£1,500,000, and 17% on anything above £1,500,000.

This surcharge applies to buy-to-let properties, second homes, holiday homes, and any situation where you own another property at the point of completion — even if that property is abroad.

First-Time Buyer Relief in Detail

First-time buyer relief was introduced to help people get onto the property ladder by reducing the SDLT burden. To qualify, you must meet all of the following conditions:

• You have never owned a residential property anywhere in the world (freehold or leasehold with more than 21 years remaining)
• The property you are buying will be your main residence
• The purchase price is £500,000 or less
• If buying jointly, both buyers must be first-time buyers

This last point is important for couples: if one person has owned property before and the other has not, neither qualifies for first-time buyer relief. The relief is worth up to £10,000 on a property costing £500,000 compared to standard rates, making it one of the most valuable tax reliefs available to new buyers.

The Additional Property Surcharge Explained

The additional property surcharge was introduced in April 2016 to cool the buy-to-let and second home market. It applies if, at the end of the day of your purchase, you own more than one residential property. There are some important exceptions:

• Replacing your main home: If you are selling your current main residence and buying a new one, the surcharge does not apply — provided the sale completes on or before the day you buy the new property. If you buy the new home before selling the old one, you pay the surcharge upfront but can claim a refund within three years if you sell the old property.
• Properties worth less than £40,000: If you own a property valued at under £40,000 it is not counted for the surcharge.
• Inherited properties: A property you inherited within the past three years, where you hold a share of 50% or less, is generally disregarded.

When and How to Pay SDLT

SDLT must be paid within 14 days of completion. In practice, your solicitor or conveyancer handles this for you as part of the completion process. They will:

1. Calculate the exact SDLT owed based on the purchase price and your circumstances
2. Submit a Stamp Duty Land Tax return to HMRC on your behalf
3. Pay the tax from the funds you have provided
4. Obtain a certificate (SDLT5) which is needed to register the property with the Land Registry

If the tax is not paid within 14 days, HMRC can charge penalties and interest. This is another reason to use a competent solicitor who will handle this promptly. The SDLT cost should be factored into your overall budget before you make an offer on a property.

Regional Differences: Scotland and Wales

SDLT only applies in England and Northern Ireland. Scotland and Wales have their own property transaction taxes:

• Scotland: Land and Buildings Transaction Tax (LBTT). The rates and bands are different from SDLT, and first-time buyer relief thresholds differ. The tax is administered by Revenue Scotland.
• Wales: Land Transaction Tax (LTT). Administered by the Welsh Revenue Authority, LTT has its own rate bands that differ from both SDLT and LBTT.

If you are buying property in Scotland or Wales, you should check the applicable rates with the relevant tax authority, as the calculators and rates discussed in this guide are specific to England and Northern Ireland.

SDLT on New-Build Properties

Stamp duty applies to new-build properties in the same way as existing properties. The purchase price is the full amount you pay to the developer. If you receive any incentives from the developer (such as furniture packages or deposit contributions), HMRC may consider these when calculating the effective purchase price.

If you are buying a new-build through a shared ownership scheme, you may have the option to pay SDLT on just your initial share or on the full market value. This choice can affect how much tax you pay initially and when you staircase to a higher share.

Tips for Managing Your Stamp Duty Bill

• Budget early: Calculate your SDLT liability before making an offer so there are no surprises at completion.
• Check your eligibility: Make sure you claim all available relief — especially first-time buyer relief or the replacement main home exemption.
• Consider the thresholds: A property priced at £125,000 has zero SDLT for standard buyers, while one at £135,000 costs £200 in SDLT. Small price differences near thresholds can have a disproportionate impact.
• Claim refunds promptly: If you paid the additional property surcharge and then sell your previous main home within three years, apply for your refund quickly.

When to Seek Professional Advice

SDLT can become complex in certain situations — for example, when buying through a company, purchasing multiple dwellings in a single transaction, or dealing with mixed-use properties. If your situation is anything other than a straightforward residential purchase, consider consulting a property tax specialist or your solicitor for tailored advice. Getting it wrong can result in overpayment, underpayment and penalties, or missed relief.