Stamp Duty explained: what you pay on a home in England

You pay on slices, not on the whole price

SDLT applies to homes bought in England and Northern Ireland. Wales has Land Transaction Tax and Scotland has its own tax. The standard rates, in force since 1 April 2025, apply to each slice of the price:

• Up to £125,000: 0%.
• From £125,001 to £250,000: 2%.
• From £250,001 to £925,000: 5%.
• From £925,001 to £1.5 million: 10%.
• Above £1.5 million: 12%.

A worked example

On a £295,000 purchase, the first £125,000 pays nothing. The next £125,000 pays 2%, which is £2,500. The last £45,000 pays 5%, which is £2,250. The total is £4,750 (GOV.UK uses this same example).

On £300,000 the bill is £5,000, about 1.7% of the price. On £400,000 it is £10,000. The tax grows faster than the price, but each slice only pays its own rate.

First-time buyers: the relief and the cliff edge

If you and everyone you are buying with are first-time buyers, you pay no SDLT up to £300,000 and 5% on the portion from £300,001 to £500,000. At £400,000 that is £5,000 instead of £10,000. At £500,000 it is £10,000.

Above £500,000 you cannot claim the relief at all and you follow the standard rates. A first-time buyer at £500,000 pays £10,000; at £510,000 they pay £15,500. A price £10,000 higher costs £5,500 more in tax, so it can pay to negotiate under the line.

If one of the buyers has owned a home before, the whole purchase loses the relief, even if the other buyer is a first-time buyer.

A second home or buy-to-let

You usually pay 5 percentage points more in every slice (5%, 7%, 10%, 15% and 17%) when the purchase means you will own more than one residential property. On a £300,000 second home the tax is £20,000 (GOV.UK uses this example too). The test counts the homes worth £40,000 or more that you will own anywhere in the world at the end of the day you complete, and your spouse or civil partner is counted with you.

• If the new home replaces your main residence and you sell the old one within 36 months of completing, you do not pay the extra 5%.
• If you have not sold the old home on completion day, you pay the higher rates first. You can then claim a refund once you have sold it, within 3 years of the purchase. The claim must reach HMRC within 12 months of the sale or of the filing date of the return, whichever is later.
• Non-UK residents pay a further 2% surcharge. You count as a non-resident if you were not in the UK for at least 183 days in the 12 months before the purchase. On a £300,000 home that makes £11,000, or £26,000 if it is also a second home.

When and how you pay

You must file the SDLT return and pay within 14 days of the effective date, which is usually the day you complete. In practice your solicitor or conveyancer files the return and pays on your behalf, and asks you for the money before completion.

A return is needed even when nothing is due if you claim a relief such as first-time buyers’ relief. Only a few purchases are exempt, such as a freehold bought for less than £40,000. If you miss the deadline you may have to pay a penalty, interest or both.

On a new lease you pay SDLT on the premium at the same rates, plus 1% on the part of the value of all the rent over the lease (its “net present value”) above £125,000.

Common mistakes

• Multiplying the price by 5%. The tax is far lower, because each slice pays only its own rate.
• Forgetting that you pay the higher rates if you buy before you sell your old home.
• Assuming the relief applies when one of the buyers is not a first-time buyer.
• Leaving the tax out of the budget. It is due within weeks of completion.
• Using old figures. The rates change at Budgets, so check GOV.UK before you exchange.