Stamp Duty Explained: Your Ultimate Guide to UK Property Tax
Buying a home in the UK? Our 2025 guide explains everything you need to know about Stamp Duty, including current rates, first-time buyer relief, and additional property surcharges.
As you budget for the exciting milestone of buying a new home, one of the most significant costs you'll need to plan for is Stamp Duty. This often-misunderstood tax can add thousands, or even tens of thousands, of pounds to your upfront costs. Understanding what it is, who pays it, and how much you'll owe is fundamental to a smooth and successful property purchase.
At Plouta, we're committed to empowering you with the financial knowledge to navigate these big life events with confidence. This guide will demystify Stamp Duty Land Tax in the UK, breaking down the rates for 2025, explaining the rules for first-time buyers and second homes, and outlining how and when it needs to be paid.
What you will learn in this guide: ⤵
What is Stamp Duty? A clear definition and explanation of its purpose.
Property Taxes Across the UK: Understanding the different names for this tax in England/Northern Ireland, Scotland, and Wales.
Current Stamp Duty Rates: A breakdown of the tax bands for various purchase scenarios.
First-Time Buyer Relief: How much you could save if you're buying your first home.
Additional Property Surcharges: The extra tax due when buying a second home or buy-to-let.
Refunds, Exemptions & Transfers: How to claim a refund and when SDLT might not be payable.
How and When to Pay: The process for filing your return and paying the tax.
Stamp Duty Calculator
Quickly find out how much Stamp Duty Land Tax (SDLT) you’ll need to pay when buying a home in England, Wales, or Scotland.
What is Stamp Duty?
Stamp Duty Land Tax (SDLT) is a tax levied on the purchase of property or land in England and Northern Ireland. The amount you pay is based on the value of the property and is calculated on a tiered basis, meaning you pay different rates on different portions of the property price.
Important Note: A UK-Wide Tax with Different Names
While commonly referred to as "Stamp Duty" across the UK, the tax is devolved and has different names and rates in Scotland and Wales:
England & Northern Ireland: Stamp Duty Land Tax (SDLT)
Scotland: Land and Buildings Transaction Tax (LBTT)
Wales: Land Transaction Tax (LTT)
This guide will focus primarily on the SDLT rules for England and Northern Ireland.
When Do You Pay Stamp Duty?
Stamp Duty is payable when you:
Buy a freehold property.
Buy a new or existing leasehold property.
Buy a property through a shared ownership scheme.
Are transferred land or property in exchange for payment (this includes taking on a mortgage).
Stamp Duty Rates & Bands (England & Northern Ireland - As of 1 April 2025)
The temporary Stamp Duty relief measures introduced in September 2022 ended on 31 March 2025. The rates below are now in effect.
1. Standard Rates (For Moving Home)
These rates apply if you're buying your main residence and are not a first-time buyer.
Standard SDLT Rates (England & NI)
| Property Price Band | SDLT Rate |
|---|---|
| Up to £125,000 | 0% |
| The portion from £125,001 to £250,000 | 2% |
| The portion from £250,001 to £925,000 | 5% |
| The portion from £925,001 to £1.5 million | 10% |
| The remaining amount (the portion above £1.5 million) | 12% |
Worked Example (Moving Home): You buy a house for £350,000.
On the first £125,000: You pay 0% = £0
On the next £125,000 (£125,001 to £250,000): You pay 2% = £2,500
On the final £100,000 (£250,001 to £350,000): You pay 5% = £5,000
Total SDLT to pay = £7,500
2. First-Time Buyer Relief
To qualify, you (and anyone you're buying with) must never have owned a home anywhere in the world.
First-Time Buyer SDLT Rates (England & NI)
| Property Price Band | First-Time Buyer SDLT Rate |
|---|---|
| Up to £300,000 | 0% |
| The portion from £300,001 to £500,000 | 5% |
| If the property price is over £500,000: You cannot claim any relief and will pay the standard rates. | |
Worked Example (First-Time Buyer): You buy your first home for £400,000.
On the first £300,000: You pay 0% = £0
On the remaining £100,000 (£300,001 to £400,000): You pay 5% = £5,000
Total SDLT to pay = £5,000
3. Higher Rates for Additional Properties (Second Homes & Buy-to-Lets)
If you are buying an additional residential property (e.g., a second home or buy-to-let) worth £40,000 or more, you will usually have to pay a 3% surcharge on top of the standard SDLT rates.
Additional Property SDLT Rates (England & NI)
| Property Price Band | Additional Property SDLT Rate (incl. 3% surcharge) |
|---|---|
| Up to £125,000 | 3% |
| The portion from £125,001 to £250,000 | 5% |
| The portion from £250,001 to £925,000 | 8% |
| The portion from £925,001 to £1.5 million | 13% |
| The portion above £1.5 million | 15% |
4. Non-UK Residents
Non-UK residents purchasing residential property in England or Northern Ireland typically pay an additional 2% surcharge on top of the relevant standard or additional property rates.
Specific Situations: Leaseholds & Corporate Purchases
Leasehold Properties For new residential leasehold properties, SDLT can be more complex. Tax may be payable on two parts:
The purchase price (lease premium): Taxed using the standard SDLT bands and rates as above.
The 'net present value' (NPV) of the rent: This is the total rent payable over the life of the lease. If this NPV exceeds the SDLT threshold (currently £250,000), a 1% SDLT rate applies to the amount above this threshold.
Corporate Purchases A flat SDLT rate of 15% applies to residential properties costing more than £500,000 purchased by certain "non-natural persons," such as companies. This higher rate is designed to deter tax avoidance. However, reliefs are available if the property is used for a commercial purpose, such as a property rental business, in which case the standard additional property rates usually apply instead.
Refund of Higher Rates of Stamp Duty
One of the most common reasons for claiming an SDLT refund arises when you buy a new main residence before you've sold your previous one. In this scenario, because you temporarily own two properties, you are required to pay the higher additional property rates upfront.
The good news is that you can usually claim a full refund of the additional rate portion of the tax you paid.
Eligibility for a Refund:
You must sell your previous main residence within 36 months (3 years) of purchasing your new one.
The property you sold must have been your only or main residence at some point.
How to Claim a Refund:
Deadline: You must claim the refund within 12 months of the sale of your previous main residence, or within 12 months of the filing date for the new property, whichever is later.
Process: You can apply for the refund online via your Government Gateway account or by post. Your solicitor can often assist with this process.
When is Stamp Duty Not Payable?
There are several specific circumstances where SDLT is not charged.
No "Chargeable Consideration": SDLT is a tax on the 'consideration' (the payment) for a property. If a property is transferred and no payment of any kind is made, no SDLT is due.
Inheriting Property in a Will: You do not pay SDLT if you inherit property under the terms of a will.
Transfers Due to Divorce or Separation: If a property is transferred between spouses or civil partners as part of a formal separation agreement or under a court order, no SDLT is payable.
Gifting a Property (with no mortgage): If a property is given as a true gift and the recipient does not take on any share of an existing mortgage or make any payment, there is no chargeable consideration, so no SDLT is due.
Stamp Duty When Transferring a Property
Whether SDLT is due on a property transfer depends entirely on the 'chargeable consideration'.
Gifting a Property with a Mortgage: This is a crucial point. If you gift a property to someone and they take on some or all of an existing mortgage, the value of the mortgage they take on is treated as chargeable consideration, and SDLT may be payable on that amount.
Transferring Equity: This is when an existing owner transfers a share of the property to another person. SDLT is payable on the consideration given for that share, which includes any cash paid plus the value of any mortgage debt the new owner takes on.
Plouta Tip: Property transfers can have significant tax implications beyond just SDLT (such as Capital Gains Tax). It is always highly recommended to seek professional legal and tax advice before undertaking any property transfer.
Stamp Duty in Scotland and Wales
It is crucial to remember that property taxes are different if you are buying in Scotland or Wales.
Scotland: You pay Land and Buildings Transaction Tax (LBTT). The rates and bands are different, as is the first-time buyer relief.
Wales: You pay Land Transaction Tax (LTT), which again has its own unique rates and thresholds and does not have a specific first-time buyer relief scheme like England's.
Always use the official calculators for Revenue Scotland or the Welsh Revenue Authority if purchasing in these countries.
How and When to Pay Stamp Duty
Deadline: You have 14 days from the "completion date" (the day the purchase is finalised and you get the keys) to file an SDLT return and pay the tax due.
Process: In nearly all cases, your solicitor or conveyancer will handle this for you. They will complete the paperwork, collect the Stamp Duty payment from you before completion, and submit everything to HMRC on your behalf.
Quick Takeaway Points on Stamp Duty:
It's a Major Upfront Cost: Factor Stamp Duty into your home-buying budget from day one.
Rates are Tiered: You pay the rate on the portion of the price within each band, not on the total purchase price.
Location Matters: The tax you pay is different in England/NI (SDLT), Scotland (LBTT), and Wales (LTT).
First-Time Buyer Relief is Valuable: It can save you thousands if you are eligible.
Second Homes Cost More: Expect a significant surcharge when buying an additional property.
Refunds are Possible: If you buy a new main home before selling your old one, you can often claim back the additional rate surcharge.
Payment is Quick: You have just 14 days after completion to file and pay, but your solicitor will almost always handle this.
Use Official Calculators: Always use the relevant government website to calculate the exact amount for your situation.
Conclusion: Plan Ahead to Avoid a Nasty Surprise
Stamp Duty is an unavoidable and significant expense for most homebuyers in the UK. By understanding how it works, what rates apply to your circumstances, and when it needs to be paid, you can budget accurately and approach your property purchase with greater financial clarity.
Planning for this tax from the very beginning of your home-buying journey ensures there are no last-minute surprises and helps keep your path to owning a new home as smooth as possible. This foresight is a key part of safeguarding your finances and building your future.
Get mortgage advice
We’ll find a mortgage adviser perfectly matched to your needs. Getting started is easy, fast and free.
Disclaimer: This guide provides general information about UK property transaction taxes based on rules and rates known as of June 2025. Tax laws, rates, and reliefs are complex and can change. This information does not constitute tax or financial advice. The examples are for illustrative purposes only. You must use the official government calculators and seek professional advice from a solicitor/conveyancer and/or a financial advisor to understand the exact amount you will need to pay based on your personal circumstances.