What is stamp duty in the UK?

In the UK, stamp duty on residential property is called Stamp Duty Land Tax (SDLT). It is a tax you pay when you buy a freehold or leasehold property or land above a certain price in England or Northern Ireland. The amount depends on the purchase price, your buyer type (first-time buyer, home mover, or additional property buyer) and whether the property is residential or non-residential.

Who has to pay stamp duty?

The buyer is responsible for paying Stamp Duty Land Tax (SDLT), not the seller. You must file an SDLT return and pay any tax due within the deadline after completion, usually via your solicitor or conveyancer. First-time buyers may pay reduced or no SDLT on part of the purchase price, while buyers of additional properties usually pay a 3 percentage point surcharge.

How is UK stamp duty (SDLT) calculated?

UK stamp duty is calculated using a banded, progressive system. Different portions of the property price are taxed at different rates. For example, a home mover buying for £400,000 pays 0% on the first band, 5% on the portion in the next band, and so on. First-time buyers and additional property buyers have different rate tables. The total SDLT is the sum of tax due in each band.

What is the stamp duty threshold?

The stamp duty threshold is the property price above which Stamp Duty Land Tax becomes payable. Below this threshold, the SDLT rate is 0% for that band. Thresholds differ for first-time buyers, home movers and buyers of additional properties, and can change with government policy, so always check the latest official rates before committing to a purchase.

Do first-time buyers pay stamp duty?

First-time buyers in England and Northern Ireland usually benefit from reduced SDLT. They pay 0% on a higher initial band of the purchase price and then standard rates above that band, up to a maximum qualifying purchase price. To qualify, all buyers must be first-time buyers and intend to live in the property as their main residence.

Is stamp duty the same in Scotland and Wales?

No. Scotland uses Land and Buildings Transaction Tax (LBTT) and Wales uses Land Transaction Tax (LTT) instead of SDLT. The bands, rates and reliefs differ from those in England and Northern Ireland. If you are buying in Scotland or Wales, you must use the relevant local calculator and guidance rather than SDLT rules.

What Is Stamp Duty? UK Stamp Duty Land Tax (SDLT) Explained

Band	Price range	Rate	Tax on this band
Estimated SDLT	£0

What is stamp duty?

Stamp duty is a tax charged on certain transactions when legal documents are signed. Historically it was literally paid by stamping documents to show tax had been paid.

In the UK property context, when people say “stamp duty” they almost always mean Stamp Duty Land Tax (SDLT) – the tax you pay when you buy property or land in England or Northern Ireland above a certain price.

Scotland and Wales have their own versions (LBTT and LTT) with different rules and rates.

Where does UK Stamp Duty Land Tax (SDLT) apply?

Applies: Residential and non‑residential property and land in England and Northern Ireland.
Does not apply:
- Scotland – uses Land and Buildings Transaction Tax (LBTT).
- Wales – uses Land Transaction Tax (LTT).

SDLT is usually paid when you:

Buy a freehold property.
Buy a new or existing leasehold.
Buy a property through a shared ownership scheme.
Receive property in exchange for payment (e.g. transfer of equity with consideration).

Who pays stamp duty and when?

The buyer pays SDLT, not the seller.
You (or your solicitor) must file an SDLT return and pay any tax due within the HMRC deadline after completion.
Even if no tax is due (because you’re under the threshold), you often still need to file a return.

How is UK stamp duty calculated?

SDLT is calculated using a banded, progressive system, similar to income tax. Different portions of the purchase price are taxed at different rates.

Conceptual formula

If your purchase price is \( P \) and there are bands \( i = 1 \dots n \) with:

Lower limit \( L_i \)
Upper limit \( U_i \) (or ∞ for the top band)
Rate \( r_i \) (as a decimal, e.g. 0.05 for 5%)

Then the SDLT due is:

\[ \text{SDLT} = \sum_{i=1}^{n} \max\big(0, \min(P, U_i) - L_i\big) \times r_i \]

In plain English: for each band, you take the portion of the price that falls in that band, multiply by that band’s rate, and add everything up.

Typical SDLT bands (illustrative)

Important: Governments change SDLT bands and rates from time to time. The bands below are illustrative only to show how the system works. Always check the latest official HMRC rates.

1. Standard home movers (replacing main residence)

Band	Portion of price	Rate
Band 1	Up to £250,000	0%
Band 2	£250,001 – £925,000	5%
Band 3	£925,001 – £1.5m	10%
Band 4	Over £1.5m	12%

2. First‑time buyers (relief example)

First‑time buyers may pay 0% on a higher initial band and then standard rates above that, up to a maximum qualifying purchase price.

3. Additional properties (3% surcharge)

If you are buying an additional residential property (e.g. a second home or buy‑to‑let) and you are not replacing your main residence, a 3 percentage point surcharge is usually added to each band.

Worked examples

Example 1 – Home mover buying for £400,000

Band 1: £0 – £250,000 at 0% → £0
Band 2: £250,001 – £400,000 (i.e. £150,000) at 5% → £7,500

Total SDLT ≈ £7,500

Example 2 – First‑time buyer at £300,000 (illustrative relief)

Band 1: 0% up to the first‑time buyer threshold.
Band 2: Remaining portion at the next rate.

The exact numbers depend on the current first‑time buyer relief rules at the time you buy.

Example 3 – Additional property at £400,000

Take the standard bands and add 3 percentage points to each:

Band 1: £0 – £250,000 at 3%
Band 2: £250,001 – £400,000 at 8%

This can significantly increase the total SDLT compared with a main‑residence purchase.

What counts as a first‑time buyer?

To qualify for first‑time buyer relief:

You must never have owned a residential property anywhere in the world.
You must be buying the property as your only or main residence.
If there is more than one buyer, every buyer must be a first‑time buyer.

When does the 3% additional property surcharge apply?

The 3% surcharge usually applies if:

After the transaction, you will own more than one residential property, and
You are not replacing your main residence (for example, you are keeping your current home and buying a second one).

There are special rules for temporary overlaps when you sell your old main residence shortly after buying a new one – in some cases you can claim a refund of the surcharge.

Other types of stamp duty around the world

Many countries use the term “stamp duty” for taxes on legal documents or property transfers, but the rules differ:

Ireland: Stamp duty on property and certain financial instruments, with its own bands and rates.
Australia: State‑based stamp duty on property purchases, often with concessions for first‑home buyers.
Other countries: Some have abolished traditional stamp duties or replaced them with modern transaction taxes.

Always refer to the local tax authority for the country or region where the property is located.

Key takeaways

“Stamp duty” on UK property usually means Stamp Duty Land Tax (SDLT).
It is a progressive, banded tax on the purchase price.
Rates and thresholds differ for first‑time buyers, home movers and additional properties.
Scotland and Wales use different systems (LBTT and LTT).
Always check the latest official rates or speak to a qualified adviser before committing to a purchase.

Frequently asked questions about stamp duty

Is stamp duty the same as land tax or council tax?

No. SDLT is a one‑off tax you pay when you buy property. Council tax is an ongoing annual charge based on the property’s valuation band and local authority rates. Some countries also have separate annual land taxes.

Can I add stamp duty to my mortgage?

Some lenders may allow you to borrow extra to cover SDLT, but this increases your loan size and interest costs. Many buyers instead save separately for SDLT alongside their deposit and fees.

Is stamp duty tax‑deductible?

For most individual home buyers, SDLT is not tax‑deductible. For landlords and businesses, SDLT may be treated as part of the acquisition cost of the property for accounting and capital gains purposes. Professional advice is recommended.

What happens if I don’t pay stamp duty on time?

HMRC can charge interest and penalties if your SDLT return or payment is late. Your solicitor or conveyancer will normally handle the filing and payment to avoid this, but you remain legally responsible.

How your stamp duty is worked out