What is stamp duty?

Stamp duty, formally Stamp Duty Land Tax (SDLT), is a one-off tax you pay when you buy property or land in England or Northern Ireland. You pay it on the purchase price once that price passes a set threshold, and the amount depends on the price, whether you are a first-time buyer, and whether you already own another home. Scotland and Wales have their own versions of the tax, so the rules below apply only in England and Northern Ireland.

The tax is charged in slices, like income tax: each rate applies only to the part of the price that falls inside its band, not to the whole price. That matters, because a common misunderstanding is that crossing a threshold taxes the entire purchase at the higher rate. It does not. The rates in force since 1 April 2025, confirmed in the Budget 2026 tax annex published by the government, are 0% up to £125,000, 2% from £125,001 to £250,000, 5% from £250,001 to £925,000, 10% from £925,001 to £1.5 million, and 12% on anything above £1.5 million.

How much stamp duty will I pay?

Work it out band by band. Take a home bought for £295,000 as your only property. You pay nothing on the first £125,000, then 2% on the next £125,000, which is £2,500, then 5% on the remaining £45,000, which is £2,250. The total is £4,750. GOV.UK publishes this exact worked example on its residential rates page, and HMRC provides an official SDLT calculator for any other price.

The same slicing applies at every price. A £600,000 purchase as a sole home costs £20,000: nothing on the first £125,000, £2,500 on the slice to £250,000, and £17,500 at 5% on the £350,000 above that. A £1.6 million purchase costs £105,750. Because the tax is calculated on slices, a small rise in price near a boundary only ever adds tax at the rate for that slice.

What do first-time buyers pay?

First-time buyers pay no stamp duty on the first £300,000 of a home costing £500,000 or less, and 5% on the part between £300,001 and £500,000. A first-time buyer paying £500,000 therefore owes £10,000. Above £500,000 the relief disappears entirely and the standard rates apply to the whole price, so a first-time buyer paying £510,000 pays the standard £15,500 rather than a reduced amount. Every person buying jointly must be a first-time buyer for the relief to apply, and the test is worldwide: if you have ever owned a home anywhere in the world, you do not qualify.

The current first-time buyer thresholds took effect on 1 April 2025, when the temporary higher thresholds of £425,000 and £625,000 expired. The government confirmed in its Budget 2026 tax annex that the residential rates in force from 1 April 2025 still apply, so no rise was announced in the October 2026 Budget.

What is the stamp duty surcharge on second homes?

If the purchase leaves you owning more than one residential property, you usually pay the higher rates for additional dwellings, which add 5 percentage points to every band. On a £295,000 second home that means 5% on the first £125,000 (£6,250), 7% on the next £125,000 (£8,750) and 10% on the final £45,000 (£4,500), a total of £19,500 instead of £4,750. The higher rates apply to purchases of £40,000 or more, and the surcharge rose from 3% to 5% for purchases with an effective date on or after 31 October 2024.

There are exceptions, including replacing a main home you have sold, and married couples are generally treated as one unit for the test. The higher rates also apply to most company purchases of residential property.

Do non-UK residents pay extra stamp duty?

Yes. Buyers who are not UK resident for stamp duty purposes usually pay a 2 percentage-point surcharge on residential property in England and Northern Ireland, on top of any other rates that apply. Residence for this purpose generally depends on being present in the UK for at least 183 days in a relevant 12-month period, although the detailed rules have exceptions. A non-resident buying a £295,000 home as a sole property would therefore pay £10,650 rather than £4,750.

What about commercial property and land?

Non-residential and mixed-use property has its own bands: 0% on the first £150,000, 2% from £150,001 to £250,000, and 5% above £250,000. Leases are taxed differently again, on the net present value of the rent, and from 1 May 2026 no SDLT is payable on the rental value under an assured tenancy. If a purchase includes both a home and commercial premises, the mixed-use rates apply to the whole price.

How and when do you pay stamp duty?

You, or usually your solicitor or conveyancer, must send an SDLT return to HMRC and pay the tax within 14 days of the effective date of the transaction, which is normally completion. Missing the deadline can mean penalties and interest, so the return is normally handled as part of the conveyancing process rather than left to the buyer afterwards. The tax due depends on the rates in force on the effective date, so a purchase completing after a Budget should be checked against the latest GOV.UK rates page.

Stamp duty in Scotland and Wales

Stamp Duty Land Tax does not apply in Scotland or Wales. Scotland charges Land and Buildings Transaction Tax (LBTT) and Wales charges Land Transaction Tax (LTT), each with its own bands, thresholds and first-time buyer rules. A buyer in Edinburgh or Cardiff therefore needs the devolved rates, not the figures in this guide.

Frequently asked questions

Do I pay stamp duty if the house costs less than £125,000? No, if it is your only residential property. Nothing is due on the first £125,000, so a sole home bought for £125,000 or less attracts no SDLT, although a return may still be needed in some cases.

Does stamp duty apply to the whole price or just part of it? Only the part inside each band. Each rate applies to the slice of the price within its band, which is why the worked example for a £295,000 home comes to £4,750 rather than 5% of the full price.

Can I add stamp duty to my mortgage? Some lenders allow it, but it is not automatic. Adding the tax to the loan means paying interest on it for the life of the mortgage, so many buyers pay it from savings or from the deposit instead. Ask your lender and conveyancer before completion.

What happens if I buy before selling my old home? You may pay the higher additional-dwelling rates at first, then claim a refund if you sell your previous main home within three years of the purchase, subject to the detailed rules. Keep the evidence and check the deadline with your conveyancer.

Where can I check the exact figure for my purchase? GOV.UK publishes the current rates and an official SDLT calculator. Rates change at fiscal events, so always run the numbers for your completion date rather than relying on a figure quoted months earlier.

Rates in this guide are those published by GOV.UK and confirmed in the Budget 2026 tax annex, in force since 1 April 2025. This is general information, not legal or tax advice.