Stamp Duty Land Tax (SDLT): Rates, First-Time Buyer Relief, and How to Calculate Your Bill
This stamp duty UK guide covers everything you need to know about Stamp Duty Land Tax in 2025/26 — the rates that apply after the March 2025 threshold reversion, first-time buyer relief, the additional dwelling surcharge, and worked examples at four common price points. Whether you are buying your first home, moving up the ladder, or adding to a portfolio, understanding your SDLT bill before exchange avoids nasty surprises.
Note: SDLT applies in England and Northern Ireland. Scotland has the Land and Buildings Transaction Tax (LBTT) and Wales has the Land Transaction Tax (LTT) — both operate on broadly similar principles with different thresholds.
What Is Stamp Duty Land Tax?
SDLT is a tax on land and property transactions in England and Northern Ireland. It is charged as a percentage of the purchase price and must be paid to HMRC within 14 days of completion. Your conveyancing solicitor or licensed conveyancer typically calculates the bill and files the return on your behalf — but the liability is yours, so it pays to understand what you owe.
Current SDLT Rates: The March 2025 Reversion
Between 23 September 2022 and 31 March 2025, the government operated temporarily elevated SDLT thresholds — the standard nil-rate band was raised to £250,000 and first-time buyer relief was extended to £425,000. Those temporary measures expired on 31 March 2025, and from 1 April 2025 the rates reverted to the position that applied before September 2022.
Standard Residential Rates (from 1 April 2025)
| Purchase Price Band | Rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001 to £250,000 | 2% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1,500,000 | 10% |
| Over £1,500,000 | 12% |
SDLT is applied on a slice basis — like income tax bands. Each rate applies only to the portion of the price within that band, not to the full purchase price.
First-Time Buyer Relief (from 1 April 2025)
First-time buyers purchasing a property costing £500,000 or less benefit from enhanced nil-rate bands:
| Purchase Price Band | FTB Rate |
|---|---|
| Up to £300,000 | 0% |
| £300,001 to £500,000 | 5% |
| Over £500,000 | Standard rates apply — no FTB relief |
If the purchase price exceeds £500,000, the buyer loses first-time buyer relief entirely and pays standard rates on the full amount.
To qualify, all buyers on the transaction must be first-time buyers (i.e. none has ever previously owned a residential property anywhere in the world, including inherited property).
Additional Dwelling Surcharge
Buyers who own (or part-own) another residential property at the end of the transaction day pay an additional 5% on top of standard SDLT rates on every band. This covers second homes, buy-to-let purchases, holiday cottages, and investment properties. The surcharge increased from 3% to 5% from 31 October 2024 (Autumn Budget 2024).
If you are replacing your main residence (selling one home and buying another on the same day, or within three years), you may be able to claim a refund of the surcharge.
Non-Resident Surcharge
Buyers who are non-UK residents pay an additional 2% on top of all other applicable rates. A buyer can be UK resident by being present in the UK for at least 183 days in the 12 months before purchase.
Worked Examples
Example 1: £250,000 — Standard Purchase
| Band | Calculation | SDLT |
|---|---|---|
| £0–£125,000 | £125,000 × 0% | £0 |
| £125,001–£250,000 | £125,000 × 2% | £2,500 |
| Total | £2,500 |
As a first-time buyer at £250,000 the bill is £0 (falls entirely within the £300,000 nil-rate band).
Example 2: £400,000 — Standard Purchase
| Band | Calculation | SDLT |
|---|---|---|
| £0–£125,000 | £125,000 × 0% | £0 |
| £125,001–£250,000 | £125,000 × 2% | £2,500 |
| £250,001–£400,000 | £150,000 × 5% | £7,500 |
| Total | £10,000 |
As a first-time buyer at £400,000: £0 on the first £300,000, then 5% on £100,000 = £5,000 total — a saving of £5,000.
Example 3: £600,000 — Standard Purchase
| Band | Calculation | SDLT |
|---|---|---|
| £0–£125,000 | £125,000 × 0% | £0 |
| £125,001–£250,000 | £125,000 × 2% | £2,500 |
| £250,001–£600,000 | £350,000 × 5% | £17,500 |
| Total | £20,000 |
No FTB relief available above £500,000 — standard rates apply in full.
Example 4: £850,000 — Standard Purchase
| Band | Calculation | SDLT |
|---|---|---|
| £0–£125,000 | £125,000 × 0% | £0 |
| £125,001–£250,000 | £125,000 × 2% | £2,500 |
| £250,001–£850,000 | £600,000 × 5% | £30,000 |
| Total | £32,500 |
Additional dwelling surcharge at £850,000: add 5% on the full £850,000 = £42,500, giving a total of £75,000.
When Is SDLT Payable?
SDLT becomes due on completion of the transaction (the day legal title transfers to you). Your solicitor must file the SDLT return and pay the tax within 14 days of completion. Failure to file on time results in automatic penalties: £100 for up to three months late, £200 for more than three months, plus interest and further penalties for prolonged non-payment.
SDLT is payable on:
- Freehold purchases
- Leasehold purchases (both the premium and, for commercial leases, the net present value of rent)
- Transfers of equity where money changes hands
- Transactions at undervalue between connected persons (HMRC may assess the market value)
SDLT is not payable on gifts between spouses or civil partners (no consideration involved), or on property transfers following divorce or dissolution under a court order.
How to File via HMRC
In practice, your solicitor files the SDLT1 return (and any supplementary forms — SDLT3 for land, SDLT4 for unusual transactions) via HMRC's online portal and transfers the tax from completion funds. You should:
- Confirm the SDLT calculation with your solicitor before exchange — not after completion
- Ensure completion funds include the SDLT amount (solicitors hold this in client account)
- Receive a copy of the filed SDLT return and HMRC's unique transaction reference number
- Keep the return for at least six years — HMRC can open an enquiry up to four years after filing in most cases
If your circumstances are complex (multiple dwellings, mixed-use, linked transactions, reliefs such as MDR or charities relief), consider taking specialist tax advice. HMRC's SDLT helpline is 0300 200 3510.
Common Mistakes to Avoid
1. Assuming you qualify for FTB relief if your co-buyer has previously owned property. If you are buying jointly and your partner has ever owned a home anywhere in the world, neither of you qualifies for FTB relief. The entire transaction reverts to standard rates.
2. Forgetting the additional dwelling surcharge when buying a second property. Buyers sometimes calculate only standard rates and budget incorrectly. At 5%, the surcharge adds £42,500 on an £850,000 purchase.
3. Not knowing about the three-year refund window. If you paid the additional dwelling surcharge when buying a new main residence (because your old home had not yet sold), you can claim a refund from HMRC if you sell the previous property within three years of the new purchase date. Claim within 12 months of the sale of the previous property.
4. Treating the nil-rate band as tax-free for the whole price. SDLT works on a marginal/slice basis. Crossing a threshold does not mean you pay the higher rate on the full price — only on the portion above the threshold.
5. Ignoring SDLT on leasehold ground rent. Where a new leasehold property has a premium (purchase price), SDLT is charged on the premium. There is also a notional SDLT charge on the net present value of ground rent where it exceeds £250 (or £0 for FTBs up to £500k). Zero ground rent leases under the Leasehold Reform (Ground Rent) Act 2022 remove this secondary charge entirely.
6. Missing the 14-day filing deadline. Even if no SDLT is due (e.g. FTB purchasing at £280,000), a nil return must still be filed within 14 days. Your solicitor will handle this, but confirm it has been done.
Related Guides
- Conveyancing: Offer to Exchange UK — how SDLT fits into the overall conveyancing timeline and when your solicitor files the return
- Conveyancing Searches Explained UK — the searches your solicitor orders between offer and exchange, and how they interact with SDLT planning
- Conveyancing Disbursements Explained — SDLT is only one disbursement; this guide itemises every other third-party fee your solicitor pays on your behalf, from Land Registry fees to the OS1 priority search
- How to Negotiate a House Price Reduction After a Survey — reducing the purchase price through renegotiation directly reduces your SDLT bill
- SDLT Additional Dwelling Surcharge: Second Home Stamp Duty Guide — the 5% ADS explained in full: rates, £40k threshold, replacement main residence exemption, and reclaim process
- How to Reclaim Overpaid Stamp Duty (SDLT) — missed FTB relief, MDR claims, and the 4-year HMRC window for overpayment refunds
- Stamp Duty: Common Mistakes and How to Reclaim Overpayments — the five most common SDLT overpayment scenarios (FTB relief missed, mixed-use misclassification, pre-June 2024 MDR, ADS replacement exemption), with the two reclaim routes and their deadlines
Understanding your SDLT bill is just one piece of the buying jigsaw. If you are purchasing a property that needs renovation, the renovation costs need to factor into your overall budget alongside stamp duty, legal fees, and survey costs. Renovate Me helps buyers and homeowners build a complete financial picture — including renovation roadmaps with staged costs and timelines. Start your personalised plan at renovate-me.madethis.app.