What Is Stamp Duty Land Tax?
Stamp Duty Land Tax (SDLT) is a tax levied on the purchase of property and land in England and Northern Ireland. (Scotland uses Land and Buildings Transaction Tax, and Wales uses Land Transaction Tax.) SDLT is calculated as a percentage of the purchase price and is typically one of the most significant transaction costs a property buyer faces.
Understanding your SDLT liability is essential for accurate budgeting. Our expert conveyancing solicitors at Legal Merchant ensure that your SDLT is calculated correctly and that all applicable reliefs are claimed on your behalf.
Current SDLT Rates (April 2025 Onwards)
Following the end of the temporary stamp duty relief in April 2025, the following rates now apply to residential property purchases:
| Purchase Price | SDLT Rate |
|---|---|
| Up to £250,000 | 0% |
| £250,001 – £925,000 | 5% |
| £925,001 – £1,500,000 | 10% |
| Over £1,500,000 | 12% |
Example: On a property purchased for £400,000, the SDLT calculation would be:
- First £250,000 at 0% = £0
- Next £150,000 (£250,001–£400,000) at 5% = £7,500
- Total SDLT: £7,500
First-Time Buyer Relief
First-time buyers purchasing a property in England benefit from a significant SDLT reduction:
- Properties up to £425,000: No SDLT payable
- Properties between £425,001 and £625,000: 5% SDLT on the portion above £425,000 only
- Properties over £625,000: Full standard rates apply (no first-time buyer relief)
To qualify as a first-time buyer, you must never have owned a residential property anywhere in the world — either alone or jointly. This applies to all purchasers where there is more than one buyer.
Additional Property Surcharge (Buy-to-Let & Second Homes)
Since April 2016, an additional 3% SDLT surcharge has applied to all purchases of additional residential properties — including buy-to-let investments, second homes, and holiday properties.
The surcharge is added to the standard rates at every band:
| Purchase Price | Standard Rate | Additional Property Rate |
|---|---|---|
| Up to £250,000 | 0% | 3% |
| £250,001 – £925,000 | 5% | 8% |
| £925,001 – £1,500,000 | 10% | 13% |
| Over £1,500,000 | 12% | 15% |
If you sell your previous main residence within 36 months of purchasing a replacement main residence on which you paid the surcharge, you may be entitled to a refund of the additional 3%.
Non-UK Resident Surcharge
Non-UK residents purchasing residential property in England pay an additional 2% SDLT surcharge on top of the standard (or additional property) rates. This applies to individuals who are not present in the UK for at least 183 days in the 12 months prior to completing the purchase.
Other SDLT Reliefs and Exemptions
Several other SDLT reliefs and exemptions may apply depending on your circumstances:
Multiple Dwellings Relief (MDR)
Where you purchase two or more dwellings in a single transaction (or linked transactions), you may be able to claim Multiple Dwellings Relief, which reduces the SDLT payable by averaging the consideration across the dwellings. This can produce a significant saving for portfolio purchasers and block-of-flats buyers.
Transfers Between Spouses and Civil Partners
Transfers of property between spouses and civil partners are generally exempt from SDLT — though care must be taken with mortgaged properties where the chargeable consideration includes the assumption of mortgage debt.
Gifts
Property given as a genuine gift — with no consideration passing — is not subject to SDLT. However, if the recipient assumes a mortgage on the gifted property, SDLT may be payable on the value of the debt assumed.
Charities Relief
Purchases by registered charities for charitable purposes are exempt from SDLT.
How and When Is SDLT Paid?
SDLT must be calculated, reported, and paid to HMRC within 14 days of completion of the property transaction. Your conveyancing solicitor handles this on your behalf as a standard part of the post-completion process.
Your solicitor will prepare and file the SDLT return with HMRC and transfer the tax payment from your completion funds. You will receive a confirmation of payment and the HMRC receipt for your records.
Common SDLT Mistakes to Avoid
SDLT errors are more common than you might think — and they can be costly. Common mistakes include:
- Failing to claim first-time buyer relief when eligible
- Incorrectly applying (or failing to apply) the additional property surcharge
- Missing the 14-day filing deadline and incurring penalties
- Failing to claim a surcharge refund when the previous main residence is sold within 36 months
- Incorrectly categorising a mixed-use property (residential vs. non-residential rates)
Working with an experienced Legal Merchant panel solicitor ensures that your SDLT is calculated correctly and all reliefs are properly claimed.
