What Is Stamp Duty Land Tax (SDLT)?
Stamp Duty Land Tax is a government tax paid when purchasing property in England and Northern Ireland. Scotland uses Land and Buildings Transaction Tax (LBTT). Wales uses Land Transaction Tax (LTT). This guide covers England and Northern Ireland only.
SDLT must be paid within 14 days of completing your purchase. Your solicitor handles this — but you need to have the funds ready before completion day. Missing the deadline triggers penalties and interest from HMRC.
✅ Key Concept: SDLT works on a tiered slice system — you pay each rate ONLY on the portion within that band, not on the full purchase price. This saves buyers thousands compared to a flat-rate system.
Standard SDLT Rates 2026 (Home Movers)
£0 to £250,000 = 0% (you pay nothing on this portion). £250,001 to £925,000 = 5%. £925,001 to £1,500,000 = 10%. Above £1,500,000 = 12%.
Worked example — £400,000 home mover: 0% on £250,000 = £0. Then 5% on £150,000 (the slice from £250k to £400k) = £7,500. Total SDLT = £7,500. Effective rate = 1.875%. You are NOT paying 5% on the full £400,000.
First-Time Buyer SDLT Relief 2026
First-time buyers receive significant SDLT relief in England:
- 0% on the first £425,000 — you pay zero stamp duty on this portion
- 5% on the portion between £425,001 and £625,000
- No relief on properties above £625,000 — standard rates apply in full
Example — first-time buyer, £500,000 property: 0% on £425,000 = £0. Then 5% on £75,000 = £3,750. Total = £3,750 vs £12,500 for a home mover. Saving = £8,750.
Example — first-time buyer, £300,000 property: 0% on entire purchase = £0 stamp duty. First-time buyers pay nothing on properties up to £425,000.
Additional Property Surcharge (Buy-to-Let & Second Homes)
Purchasing an additional residential property — buy-to-let, holiday home, or second home — triggers a 5% surcharge on every SDLT band in addition to standard rates.
Additional property rates 2026: £0–£250,000 = 5%. £250,001–£925,000 = 10%. £925,001–£1,500,000 = 15%. Above £1,500,000 = 17%.
Example — £350,000 buy-to-let: 5% on £250,000 = £12,500. Then 10% on £100,000 = £10,000. Total = £22,500. Compare this to £5,000 for a home mover — the surcharge adds £17,500. Factor this into your rental yield calculations.
⚡ BTL investors: The 5% surcharge significantly impacts your net yield in Year 1. On a £350,000 property at 6% gross yield (£21,000/year), your entire first year of rent goes to stamp duty alone.
Stamp Duty on Common Property Prices (2026)
£200,000 Home Mover = £0. First-Time Buyer = £0. BTL/Second Home = £10,000.
£300,000 Home Mover = £2,500. First-Time Buyer = £0. BTL/Second Home = £15,000.
£400,000 Home Mover = £7,500. First-Time Buyer = £0. BTL/Second Home = £20,000.
£500,000 Home Mover = £12,500. First-Time Buyer = £3,750. BTL/Second Home = £25,000.
£750,000 Home Mover = £25,000. First-Time Buyer = No relief (above £625k threshold) = £25,000. BTL = £50,000.
When Is Stamp Duty Exempt?
- Properties under £40,000 — no SDLT regardless of buyer type
- Property transferred as a gift — no SDLT if no money changes hands
- Inherited property — no SDLT on inheritance
- Transfers between spouses or civil partners — generally exempt
Can Stamp Duty Be Added to Your Mortgage?
Most UK lenders do not allow SDLT to be added to a residential mortgage. It must be paid from your own cash funds at completion. Budget for it separately and ensure it is sitting in your solicitor’s client account before exchange of contracts.
Stamp Duty Reclaim — When You Can Get Money Back
- If you buy an additional property but sell your previous main residence within 3 years, you can reclaim the 5% surcharge from HMRC
- Certain reliefs can be claimed up to 12 months after the SDLT return filing date if you were eligible but did not claim
- Multiple Dwellings Relief — if buying multiple properties in one transaction, you may pay SDLT based on the average price per dwelling
Scotland and Wales: Different Systems
Scotland — LBTT (Land and Buildings Transaction Tax): 0% up to £145,000. 2% on £145,001–£250,000. 5% on £250,001–£325,000. 10% on £325,001–£750,000. 12% above £750,000. First-time buyer relief starts at £175,000.
Wales — LTT (Land Transaction Tax): 0% up to £225,000. 6% on £225,001–£400,000. 7.5% on £400,001–£750,000. 10% on £750,001–£1,500,000. 12% above. Different structure to SDLT.
Frequently Asked Questions
Q: Do first-time buyers pay any stamp duty in 2026?
A: First-time buyers pay 0% on properties up to £425,000 — no stamp duty at all. On properties between £425,001 and £625,000, they pay 5% only on the portion above £425,000. Properties above £625,000 receive no first-time buyer relief.
Q: How much stamp duty on a £250,000 house?
A: As a home mover: £0 (the first £250,000 is 0% band). As a first-time buyer: £0. As an additional property buyer: £12,500 (5% on the full £250,000).
Q: Can I avoid stamp duty on a second home?
A: No legal way to avoid the additional property surcharge exists for genuine second home or buy-to-let purchases. However, if you sell your original main home within 3 years of buying the new property, you can reclaim the 5% surcharge from HMRC.
Q: When must stamp duty be paid?A: Within 14 days of completing your property purchase. Your solicitor handles the payment on your behalf but requires the funds in advance. Late payment incurs automatic penalties plus daily interest from HMRC.