Stamp Duty Land Tax Explained for Buyers
Stamp Duty Land Tax (SDLT) is a tax you pay when you buy property or land in England and Northern Ireland. For ordinary residential purchases, tax is due when the price is at least £125,000. First-time buyers can pay no SDLT on the first £300,000 of a home costing £500,000 or less, then 5% on the portion between £300,001 and £500,000.
Scotland and Wales have their own property taxes. More guides on buying a home are in the mortgages hub. A Lifetime ISA can be used towards a first home if you meet the GOV.UK conditions.
When SDLT applies
SDLT applies to residential property in England and Northern Ireland when the purchase price reaches the relevant threshold.
For most buyers, tax starts once the price is £125,000 or more. First-time buyers face a higher nil-rate threshold: £300,000, provided the property is worth £500,000 or less and every buyer is a first-time buyer.
Standard residential rates
Rates apply to the portion of the price in each band, not the whole price at one rate. The table shows standard residential SDLT for a single dwelling that will be your only residential property after the purchase.
| Portion of price | SDLT rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001 to £250,000 | 2% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1.5 million | 10% |
| Above £1.5 million | 12% |
GOV.UK works through a £295,000 purchase: £0 on the first £125,000, £2,500 on the next £125,000 (2%), and £2,250 on the remaining £45,000 (5%), totalling £4,750.
First-time buyer relief
Relief is available when you and anyone buying with you are all first-time buyers and the price is £500,000 or less.
You pay 0% on the first £300,000 and 5% on the slice from £300,001 to £500,000.
GOV.UK’s example: a first-time buyer paying £500,000 owes £10,000 (0% on the first £300,000 and 5% on the remaining £200,000).
If the price is over £500,000, you cannot claim the relief and the standard residential rates apply.
Relief is separate from how you fund the deposit. Government rules for a Lifetime ISA set their own price cap (£450,000 or less for a first home). SDLT thresholds follow the figures above.
Additional properties
You usually pay an extra 5% on top of the standard residential rates if you already own another residential property and are not replacing your main home in line with GOV.UK rules.
Non-UK residents usually pay a 2% surcharge on top of the rates that apply to their purchase.
Check GOV.UK for detailed conditions on main residence replacement and mixed-use property, as these can change which rate schedule applies.
Returns and the 14-day deadline
You must send an SDLT return to HMRC and pay the tax within 14 days of completion.
Missing the deadline can lead to penalties and interest.
A solicitor, agent or conveyancer usually files the return and pays SDLT on completion day, then adds the amount to their bill. If they do not do this for you, you can file a return and pay the tax yourself.
Frequently asked questions
When do I pay Stamp Duty Land Tax?
You pay SDLT on residential property in England and Northern Ireland when the price is at least £125,000, or £300,000 for qualifying first-time buyers on homes worth £500,000 or less.
How much SDLT is due on a £295,000 home?
GOV.UK's example gives total SDLT of £4,750: nothing on the first £125,000, 2% on the slice up to £250,000 and 5% on the remainder.
Do first-time buyers always get relief?
Relief applies when everyone buying is a first-time buyer and the price is £500,000 or less. Above £500,000 you pay standard rates with no first-time buyer relief.
What if I already own another home?
You usually pay an extra 5% on top of the standard residential rates when you buy an additional residential property.
How long do I have to file and pay?
You must send an SDLT return to HMRC and pay within 14 days of completion. Late filing or payment can lead to penalties and interest.
Sources
Disclaimer: This article is general information and not personal financial, tax or legal advice. Check your own situation with HMRC, GOV.UK or a regulated adviser.