UK Stamp Duty Guide: Rates and Thresholds Explained

How it's calculated: a banded, not flat, tax

Stamp Duty Land Tax (SDLT) applies in England and Northern Ireland when you buy residential property above a certain price (Scotland has its own Land and Buildings Transaction Tax, and Wales has Land Transaction Tax — different bands, same basic idea). Like income tax, it's banded: you pay a percentage on the portion of the price within each band, not one flat rate on the whole purchase price. A property priced above the top band doesn't get taxed at the top rate on the entire amount — only on the slice within that band.

First-time buyer relief

First-time buyers typically pay a reduced rate up to a certain threshold, and none at all below a lower threshold, provided the whole property is being bought as their only or main residence. There's usually a maximum purchase price above which the relief stops applying entirely. Check the current thresholds on gov.uk, as these are among the figures most frequently adjusted at Budget.

The additional-property surcharge

Buying a second home, a buy-to-let, or any additional residential property typically triggers a surcharge on top of the standard rates, applied across every band rather than just the top one. This is the single biggest reason two buyers purchasing identical properties can owe very different amounts — if you already own a home (even one you're in the process of selling), budget for this.

If you're buying a new main residence before selling your current one, you usually pay the surcharge upfront and can reclaim it if you sell your previous main residence within a set window afterwards — worth planning your cashflow around, not just your eventual tax bill.

Non-UK resident surcharge

Buyers who don't meet UK residence tests for SDLT purposes typically pay an additional surcharge on top of standard (and additional-property, if applicable) rates. This applies based on your residence status around the time of purchase, not your nationality.

What this means when you're budgeting

Stamp duty is due on completion and isn't something a mortgage typically covers as part of the loan — it needs to be funded from your own cash alongside your deposit. When comparing what you can actually afford against a valuation estimate, factor in SDLT (plus legal fees and survey costs) on top of the purchase price, not as an afterthought.