UK Stamp Duty Explained

Stamp Duty Land Tax is the headline transaction tax on UK property purchases — but the rules differ across England, Wales, and Scotland, and the recent reforms to the first-time-buyer relief and second-home surcharge have made the calculation materially more complex. This guide walks through each band, threshold, and exemption with worked examples.

The headline SDLT bands (England and NI)

For a primary residence purchase in England or Northern Ireland by a non-first-time buyer, SDLT bands as of 2026 are: 0% on the first £125,000, 2% on the portion from £125,001 to £250,000, 5% on the portion from £250,001 to £925,000, 10% on the portion from £925,001 to £1,500,000, and 12% on the portion above £1,500,000.

A worked example. A £350,000 primary-residence purchase by a non-first-time buyer attracts £0 on the first £125,000, £2,500 on the next £125,000 (the 2% band), and £5,000 on the final £100,000 (the 5% band) — totalling £7,500 SDLT. The effective rate on the full purchase price is roughly 2.1%.

These figures change periodically when the Chancellor adjusts the bands or thresholds in a Budget statement. PlainMortgage carries the current band table on the SDLT page; HMRC publishes the authoritative table at gov.uk.

First-time-buyer relief (England and NI)

First-time buyers in England and Northern Ireland enjoy a higher zero-band threshold: no SDLT on the first £425,000 of the purchase price, and the standard rates on the portion from £425,001 up to £625,000. If the purchase price exceeds £625,000, the relief is lost entirely and SDLT applies on the full price as for a non-first-time buyer.

A worked example. A first-time buyer purchasing at £400,000 pays £0 SDLT (the full price falls below the £425,000 threshold). A first-time buyer at £500,000 pays nothing on the first £425,000 and 5% on the £75,000 above — £3,750 SDLT. A first-time buyer at £700,000 pays the full standard rate on the entire £700,000 — roughly £25,000 — because the relief is lost above £625,000.

The relief is binary at £625,000. This creates a sharp cliff edge: a first-time buyer paying £625,001 pays roughly £20,000 more in SDLT than one paying £625,000. In high-cost metros where prices cluster near the cliff, the SDLT differential should enter the offer-negotiation calculation directly.

Second-home surcharge

Buyers acquiring an additional residential property — typically a second home or buy-to-let — pay a 5% surcharge on top of the standard SDLT rates on the entire purchase price, not just the portion above each threshold.

A worked example. A £350,000 buy-to-let purchase by an existing homeowner attracts the standard £7,500 SDLT (as worked above) plus a the highest LTV tier surcharge on the full £350,000 — that is, an additional £17,500 — for a total of £25,000 SDLT. The effective rate on the full purchase price is roughly 7.1%.

The surcharge applies if the purchaser owns any other residential property anywhere in the world at the end of the transaction day, with limited exemptions for replacement of a primary residence within a three-year window. The rules around replacement, divorce, and inherited shares are intricate; HMRC publishes detailed guidance, and most buyers in non-vanilla cases consult a property solicitor before exchange.

LBTT (Scotland) and LTT (Wales)

Scotland operates its own transaction tax — the Land and Buildings Transaction Tax (LBTT), administered by Revenue Scotland. The structure is broadly similar to SDLT but the bands and rates differ. As of 2026, LBTT bands are 0% to £145,000, 2% to £250,000, the upper threshold to £325,000, 10% to £750,000, and 12% above. First-time buyers in Scotland get relief up to £175,000.

Wales operates the Land Transaction Tax (LTT), administered by the Welsh Revenue Authority. LTT bands as of 2026 are 0% to £225,000, 6% to £400,000, 7.the band ceiling to £750,000, 10% to £1,500,000, and 12% above. There is no first-time-buyer relief in Wales — the £225,000 threshold is the universal zero band, which already accommodates most first-time purchases.

Both LBTT and LTT operate their own additional-dwelling surcharges (in Scotland, the Additional Dwelling Supplement of 6%; in Wales, the higher rate of LTT). The rules are administered separately from English SDLT; transactions straddling borders are uncommon but require specialist advice.

When SDLT is paid and by whom

SDLT is paid by the buyer, not the seller. The conveyancer or solicitor acting for the buyer typically collects the SDLT amount alongside other completion funds and submits the SDLT return to HMRC within 14 days of completion. Late filing attracts penalties; the standard 14-day window has been progressively tightened from 30 days in earlier years.

For cash buyers, SDLT comes out of completion funds. For mortgage purchases, SDLT cannot be added to the mortgage itself — the buyer must have cash available at completion for the SDLT, the deposit, the conveyancer’s fees, and any other costs (survey, removal, mortgage product fee if not folded into the loan).

Reclaim is possible in specific scenarios — primarily when the second-home surcharge has been overpaid because the buyer’s previous primary residence sells within three years of the new purchase. Reclaim applications go through HMRC; processing typically takes weeks to months.

Frequently asked questions

UK mortgage rate snapshot — selected LTV bands

"The Bank of England Bank Rate sets the floor for UK mortgage pricing — but lender margins, LTV-band step-ups, and Affordability Test arithmetic determine the actual rate you pay."