Stamp Duty Tax Guide
How does stamp duty change what you can afford?
Written and reviewed by Sophie Harrison · Page last reviewed 12 June 2026
Stamp duty is usually the largest cash cost of a purchase after the deposit — and it can't normally be borrowed. Knowing your figure early changes how much deposit you can really put down. Calculate yours now →
What is stamp duty and how is it banded?
Stamp Duty Land Tax (SDLT) applies to property purchases in England and Northern Ireland. Scotland charges Land and Buildings Transaction Tax (LBTT) and Wales charges Land Transaction Tax (LTT) instead — same idea, different bands. All three work like income tax: each slice of the price is taxed at that slice's rate, not the whole price at the top rate.
SDLT bands — standard residential purchase
- 0% on the first £125,000
- 2% on £125,001 – £250,000
- 5% on £250,001 – £925,000
- 10% on £925,001 – £1.5 million
- 12% above £1.5 million
Worked example: on a £350,000 home you pay nothing on the first £125,000, £2,500 on the next £125,000, and £5,000 on the final £100,000 — £7,500 in total. Run your own numbers, including Scotland and Wales →
What relief do first-time buyers get?
First-time buyer relief is worth thousands — but it has a hard edge.
- No SDLT on properties up to £300,000.
- 5% on the portion between £300,000 and £500,000.
- Above £500,000 the relief is lost entirely — a £500,001 purchase is taxed at standard rates on the whole price. That cliff edge is worth factoring into offers near the threshold.
- Every buyer on the application must be a first-time buyer for the relief to apply.
- Qualifying shared ownership purchases can also claim the relief.
Which surcharges apply to extra properties?
Buying a property that isn't replacing your main home costs materially more.
- Additional property surcharge — 5% on top of every band, on the whole price. This catches buy-to-let purchases and second homes, whether or not the other properties are mortgaged.
- The three-year reclaim: buy a new main residence before selling the old one and you pay the surcharge upfront — but can reclaim it if the old home sells within three years.
- Non-UK residents pay a further 2% surcharge on residential purchases in England and Northern Ireland.
- Scotland's Additional Dwelling Supplement (ADS) is 8%; Wales applies higher LTT bands to additional properties.
- For landlords: the surcharge is part of the true acquisition cost when working out whether a deal stacks up — alongside rate, fees and rental cover.
When and how is stamp duty paid?
- The return and payment are due within 14 days of completion in England and Northern Ireland.
- In practice your conveyancer files the return and pays HMRC from funds you provide at completion.
- You generally cannot add stamp duty to the mortgage — it comes from cash alongside your deposit. A buyer with £40,000 saved buying at £350,000 really has £32,500 of deposit once £7,500 of SDLT is set aside, which can change your loan-to-value band and therefore your rate.
- Check your affordability with the tax included — our affordability calculator and stamp duty calculator together give the full cash picture.
What other property taxes matter?
Stamp duty is one-off; these recur or arrive at sale.
- Council Tax — based on 1991 valuations in England and Scotland, varying significantly by local authority and band; check the band before you offer.
- Capital Gains Tax — can apply when selling a property that isn't your main residence; reliefs and allowances may reduce the liability.
- Income tax on rent — rental income is taxable, and individual landlords receive only a basic-rate credit for mortgage interest rather than full deductibility, which is one reason many landlords now buy through limited companies.
How can buyers plan around the tax?
- Price near a band edge or the first-time buyer cliff? Model both sides before you offer.
- Replacing a main residence while keeping the old one? Diary the three-year reclaim window.
- Budget stamp duty as unborrowable cash from day one, so your achievable LTV band is realistic.
- For multiple properties, mixed-use purchases or non-resident situations, take professional tax advice — the rules change at Budgets, and structure decisions are hard to unwind.
