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Understanding Stamp Duty in the UK

Stamp Duty Land Tax rates and guidance

Stamp Duty Land Tax (SDLT), often called stamp duty, may be payable when you purchase property or land in England or Northern Ireland. Different property taxes apply elsewhere in the UK:
SDLT can apply when you:
  • Buy a freehold property
  • Buy a new or existing leasehold property
  • Purchase through a shared ownership scheme
  • Receive land or property in exchange for payment, such as taking on a mortgage or buying a share in a property

Stamp duty thresholds

The standard residential SDLT threshold is £125,000. This means standard-rate SDLT normally applies when a residential property costs more than £125,000. Different thresholds and rates apply to:
  • First-time buyers
  • Additional properties
  • Non-UK residents
  • Non-residential and mixed-use properties
  • Certain companies, trusts and linked purchases
The SDLT threshold for non-residential land and property is £150,000.

Standard stamp duty rates

The following rates usually apply if the property will be the only residential property you own:
Up to £125,000 0%
£125,001 to £250,000 2%
£250,001 to £925,000 5%
£925,001 to £1.5 million 10%
Above £1.5 million 12%
SDLT is calculated using increasing portions of the property price rather than applying one rate to the full amount.
For example, if you purchase a property for £295,000, the SDLT is calculated as follows:
  • 0% on the first £125,000 = £0
  • 2% on the next £125,000 = £2,500
  • 5% on the remaining £45,000 = £2,250
  • Total SDLT = £4,750
Use the official HMRC Stamp Duty Land Tax calculator to estimate how much you may need to pay.

Stamp duty for first-time buyers

You may be eligible for First-Time Buyers’ Relief if you and everyone purchasing the property with you are first-time buyers. The property must also cost no more than £500,000. Eligible first-time buyers pay:
  • No SDLT on the first £300,000
  • 5% on the portion from £300,001 to £500,000
For example, a qualifying first-time buyer purchasing a property for £500,000 would pay:
  • 0% on the first £300,000 = £0
  • 5% on the remaining £200,000 = £10,000
  • Total SDLT = £10,000
If the property costs more than £500,000, you can’t claim First-Time Buyers’ Relief, and the standard rates apply to the full purchase price.

Higher rates for additional properties

You will usually pay higher SDLT rates if buying a residential property means you will own more than one property. The current higher rates are:
Up to £125,000 5%
£125,001 to £250,000 7%
£250,001 to £925,000 10%
£925,001 to £1.5 million 15%
Above £1.5 million 17%
The higher rates can apply when purchasing a second home, buy-to-let property or another residential property worth £40,000 or more. HMRC may consider property owned anywhere in the world when determining whether the higher rates apply. Companies purchasing residential property also usually pay higher rates.
Read the full HMRC guidance on higher stamp duty rates if you are unsure whether they apply.

Rates for non-UK residents

A further 2% SDLT surcharge will usually apply to non-UK residents purchasing residential property in England or Northern Ireland. The surcharge can be added to the standard rates or the higher rates for additional properties. SDLT uses its own residency rules, so your status for other UK taxes may not determine whether the surcharge applies.
Check the HMRC guidance for non-UK residents for the full conditions and available refunds.

How much of the purchase is taxed?

The amount used to calculate SDLT is called the consideration. This is usually the price paid for the property or land. However, consideration can also include:
  • Goods
  • Works or services
  • Release from a debt
  • Transfer of a debt, including an outstanding mortgage
HMRC provides further guidance on how to calculate chargeable consideration.

The value you pay SDLT on (the ‘consideration’)

The total value you pay SDLT on (sometimes called the ‘consideration’) is usually the price you pay for the property or land. Sometimes it might include another type of payment like:

  • goods
  • works or services
  • release from a debt
  • transfer of a debt, including the value of any outstanding mortgage

Find out how to work out the consideration if your situation is complicated.

If you’re replacing your main residence

You will not pay the extra 5% SDLT if the property you’re buying is replacing your main residence and you’ve already sold it.

If you have not sold your main residence on the day you complete your new purchase, you’ll have to pay higher rates. This is because you own 2 properties.

You can apply for a refund if you sell your previous main home within 36 months.

If it takes longer than 36 months to sell your previous main home

You may still be able to get a refund of the extra 5% SDLT if all of the following apply:

  • you purchased your new home on or after 1 January 2017
  • exceptional circumstances stopped you from selling your old home, for example, government restrictions because of coronavirus (COVID-19) or a public authority blocking the sale
  • you have now sold your old home

To claim a refund, write to HMRC and explain why the sale took longer than 36 months.

Include:

  • your details
  • details of the main buyer – if different to your own
  • details of the exceptional circumstances that prevented the sale of your property
  • details of the property where higher rate SDLT was paid – including the address, date of purchase and SDLT unique transaction reference number
  • details of the previous main residence – including the address, date of sale and SDLT unique transaction reference number
  • the amount of higher rate SDLT paid
  • the amount of tax you’re asking for a repayment of
  • a bank account and sort code for the person receiving the payment

How and when to pay

You must send an SDLT return to HMRC and pay the tax within 14 days of completion.

If you have a solicitor, agent or conveyancer, they’ll usually file your return and pay the tax on your behalf on the day of completion. They’ll then add the tax to their fees. They’ll also claim any relief you’re eligible for, such as if you’re a first-time buyer.

If they do not do this for you, you can file a return and pay the tax yourself.

In certain situations, you do not need to send a return.

You may be charged penalties and interest if you do not file your return and make your payment within 14 days of completion.

Stamp Duty Calculator

Please note: If you are moving home or a next-time buyer, there is no need to check any boxes.
Simply enter your purchase price and click the “Calculate” button.