Stamp duty is one of the biggest upfront costs of buying a home, and one of the least understood. Most buyers don't think about it until their solicitor mentions it — by which point it's too late to plan for it.
How stamp duty works
Stamp Duty Land Tax (SDLT) applies when you buy a property or land in England or Northern Ireland for more than £40,000. It's a transaction tax — you pay it once at the point of purchase, not annually like council tax.
The crucial thing to understand is that SDLT is calculated in bands, exactly like income tax. You pay each rate only on the slice of the price that falls within that band, not on the entire purchase price.
This means there are no cliff edges where buying a property for £1 more suddenly costs you thousands extra in tax (with one exception for first-time buyers, covered below).
2026/27 standard bands (home movers)
| Property price band | SDLT rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001 – £250,000 | 2% |
| £250,001 – £925,000 | 5% |
| £925,001 – £1,500,000 | 10% |
| Over £1,500,000 | 12% |
These are the bands that apply from 1 April 2025 onwards. The temporary higher thresholds introduced in September 2022 (with a £250,000 nil-rate band) expired on 31 March 2025.
Worked examples
Buying a £300,000 home as a home mover:
| Band | Portion | Rate | Tax |
|---|---|---|---|
| £0 – £125,000 | £125,000 | 0% | £0 |
| £125,001 – £250,000 | £125,000 | 2% | £2,500 |
| £250,001 – £300,000 | £50,000 | 5% | £2,500 |
| Total | £5,000 |
The effective rate is 1.67% — much lower than the 5% headline rate for the top band.
Buying a £500,000 home as a home mover:
| Band | Portion | Rate | Tax |
|---|---|---|---|
| £0 – £125,000 | £125,000 | 0% | £0 |
| £125,001 – £250,000 | £125,000 | 2% | £2,500 |
| £250,001 – £500,000 | £250,000 | 5% | £12,500 |
| Total | £15,000 |
Effective rate: 3.0%.
First-time buyer relief
If you've never owned a property anywhere in the world, you qualify for first-time buyer (FTB) relief — provided the property costs no more than £500,000.
| Property price band | FTB rate |
|---|---|
| Up to £300,000 | 0% |
| £300,001 – £500,000 | 5% |
A first-time buyer purchasing at £350,000 pays nothing on the first £300,000 and 5% on the remaining £50,000 = £2,500. A home mover buying the same property pays £7,500 — a saving of £5,000.
There's a cliff edge here: if the property costs £500,001 or more, FTB relief is lost entirely and standard rates apply to the whole purchase. A first-time buyer paying £500,000 owes £10,000 in SDLT; one paying £500,001 owes £15,000. That single extra pound costs £5,000 in stamp duty.
Who qualifies? Every buyer on the transaction must be a first-time buyer. If you're buying jointly with a partner who has previously owned property — even abroad, even decades ago — relief is unavailable. You must also intend to live in the property as your only or main home.
The additional property surcharge
Buying a second home, a buy-to-let, a holiday cottage, or a property for a family member? You pay a 5% surcharge on top of every standard band.
| Property price band | Standard rate | Additional property rate |
|---|---|---|
| Up to £125,000 | 0% | 5% |
| £125,001 – £250,000 | 2% | 7% |
| £250,001 – £925,000 | 5% | 10% |
| £925,001 – £1,500,000 | 10% | 15% |
| Over £1,500,000 | 12% | 17% |
The surcharge increased from 3% to 5% on 31 October 2024.
A buy-to-let purchase at £250,000 pays 5% on the first £125,000 (£6,250) plus 7% on the next £125,000 (£8,750) = £15,000. A home mover pays just £2,500 on the same property.
If you're replacing your main home and there's a gap between selling and buying, you pay the surcharge upfront but can reclaim it if you sell the previous main home within 36 months.
Non-UK resident surcharge
If you're not resident in the UK for tax purposes, an additional 2% surcharge applies on top of all other rates. This stacks with the additional property surcharge if applicable — so a non-UK resident buying a second home pays the standard rate + 5% + 2%.
Stamp duty in Scotland and Wales
SDLT only applies in England and Northern Ireland. If you're buying in Scotland, you pay Land and Buildings Transaction Tax (LBTT) to Revenue Scotland, which has different bands and rates. Wales has Land Transaction Tax (LTT), also with its own structure.
The bands, thresholds, and surcharges are all different. This guide and the snapcalcs stamp duty calculator cover England and Northern Ireland only.
This article covers Stamp Duty Land Tax (SDLT) in England and Northern Ireland. Scotland and Wales have their own property transaction taxes with different rates and thresholds.
When and how you pay
Stamp duty is due within 14 days of completion. In practice, your solicitor or conveyancer handles the SDLT return and payment for you — they file it electronically with HMRC and pay from the funds you transfer on completion day.
You'll see the stamp duty figure on your solicitor's completion statement, along with their fees, Land Registry fees, and any other disbursements. Make sure you've budgeted for it alongside your deposit — stamp duty comes out of your own funds, not the mortgage.