Stamp Duty Land Tax in England and Northern Ireland

Stamp Duty Land Tax, usually just called Stamp Duty, is the tax you pay when you buy a home or other property in England or Northern Ireland. It applies in those two nations only: Scotland collects Land and Buildings Transaction Tax and Wales collects Land Transaction Tax instead, each with their own rates and thresholds¹. HMRC publishes its quarterly SDLT statistics for transactions where the value is £40,000 or above, and as of 1 April 2025 the threshold is £125,000 for residential properties and £150,000 for non-residential properties².

For most home movers the bill starts once the price passes £125,000. On a house bought at the average UK house price of £292,000 in England or Northern Ireland, the Stamp Duty cost would be £4,600, while a first-time buyer purchasing a house of that value pays nothing at all³. The rates run from 0% on the first £125,000 up to 12% on the portion above £1.5 million, and the tax is charged in slices rather than on the whole price, which makes a big difference to what you actually pay.

What Stamp Duty Land Tax is and where it applies

Stamp Duty Land Tax is charged by HMRC on property transactions where the property value is more than the set SDLT thresholds, and it applies in England and Northern Ireland only¹. Wales is the clearest illustration of how the map has split: from 1 April 2018, Land Transaction Tax replaced SDLT on residential and non-residential property and land interests purchased in Wales⁷. Scotland made the same kind of break with its own tax, so a buyer's bill depends first on which country the property sits in.

You normally have to send a return and pay the tax when you buy a freehold property, where you own the property and land outright, or when you take over a property and pay money or take on a debt, for example a mortgage, for the property⁸. That second point matters for anyone assuming the tax only applies to cash purchases: taking on someone else's mortgage as part of the deal counts. A return is not needed in every situation, and the exemptions, including property left to you in a will, are covered later in this guide.

SDLT is one of several one-off costs that come with buying. Northern Ireland's official home buying guidance lists the charges a buyer may face: a solicitor, an independent surveyor, a mortgage arrangement fee, a Land Registry fee and Stamp Duty⁹. The tax is payable at the point of completion¹⁰, which means it lands at the same time as the deposit, legal fees and moving costs, and it is worth budgeting for alongside the other costs of buying a house.

Stamp Duty rates: 0% up to £125,000, rising to 12% over £1.5 million

From 1 April 2025, the main residential rates for a buyer's only or main home are:

The standard rates are confirmed in independent guidance and in official statistics, which record 0% up to £125,000, 2% from £125,001 to £250,000 and 12% over £1.5 million³. The additional property column, explained in full below, adds five percentage points to each band⁵.

Two worked examples show what these rates mean in practice. A home mover completing on a property worth £500,000 in England or Northern Ireland pays £15,000 in Stamp Duty from 1 April 2025¹². The April 2025 change was significant: the ONS notes that house price statistics for that period coincided with the Stamp Duty Land Tax changes in England and Northern Ireland from 1 April 2025, when thresholds for home movers, first-time buyers and second home buyers all decreased¹³. Buyers who completed just before that date faced lower bills on the same properties.

Stamp Duty is charged in slices, not on the whole price

The single most misunderstood thing about Stamp Duty is how the rate is applied. SDLT is charged on a slice basis: the rates are graduated so that more expensive properties face progressively higher rates, and each rate applies only to the portion of the price within its band¹. A buyer whose price tips into the 5% band does not pay 5% on the whole price, only on the slice above the previous threshold.

SDLT is charged on a slice basis: the rates are graduated, so more expensive properties face progressively higher rates rather than one rate on the whole price¹. Under the current bands, nothing is taxed on the first £125,000 of a residential purchase, and the slice from £125,001 to £250,000 is taxed at 2%². On a £250,000 house, that means 2% of the £125,000 slice between the two figures, or £2,500, not 2% of the full price.

The slice structure has not always been the rule. SDLT moved to a slice structure for residential transactions on 4 December 2014 and for non-residential and mixed transactions on 17 March 2016¹⁵. Before that, a single rate applied to the whole price, which produced cliff edges where one pound of extra price could add thousands to the bill. The slice system smooths those edges, but the principle to hold on to when estimating a bill is simple: find the band the price falls into, then apply each rate only to its own slice.

First-time buyer relief: no tax on the first £300,000

First-time buyers in England and Northern Ireland get a dedicated relief that exempts the first £300,000 of the price from SDLT, provided the total purchase price does not exceed £500,000⁴. The relief cannot be claimed on transactions over £500,000 at all: above that cap a first-time buyer pays the standard rates on the whole price⁴. Independent guidance gives the same picture, noting that first-time buyers pay no Stamp Duty on the first £300,000, and that a first-time buyer purchasing a house at the average UK price of £292,000 pays zero³.

The £300,000 figure is itself the result of the April 2025 change. Before 1 April 2025, the relief was more generous: independent guidance from 2024 records that in England you paid no Stamp Duty on the first £250,000 of a main residence as standard, rising to £425,000 if you and anyone you were buying with were a first-time buyer¹⁶. The thresholds for first-time buyers fell on 1 April 2025 alongside the main thresholds¹³, so anyone who missed that window faces a materially higher bill than the same purchase a year earlier.

Who counts as a first-time buyer has its own rules, and buying with someone who has owned before can change the position entirely. The dedicated guides to Stamp Duty first-time buyer relief, to who counts as a first-time buyer and to whether relief exists above £500,000 cover the detail, and the first-time buyer schemes page sets out the government schemes that sit alongside the relief.

Second homes and buy-to-let: an extra 5 percentage points

In England and Northern Ireland there is a 5 percentage point surcharge on buy-to-let, holiday or second homes⁵. The equivalent SDLT higher rates for additional dwellings in England and Northern Ireland are currently five percentage points above the standard residential rates¹⁵, which produces the additional property column in the rates table above: 5% from the first pound of a qualifying purchase, 7% on the £125,001 to £250,000 band, 10% up to £925,000, 15% up to £1.5 million and 17% above that⁵. The legislation behind the surcharge sets out the same band structure for higher rates transactions¹⁷.

There is a floor below which the surcharge does not bite. If the total price paid for the property is up to £40,000, no Stamp Duty is payable at all⁵. Above that, the surcharge applies even to the first band, which is why an additional property attracts tax from the first pound while a main home does not.

The surcharge catches purchases that are not obviously investments. Someone using let to buy, keeping their existing home to rent out while buying a new one to live in, is technically buying a second home even though the new property is the one they will live in, so the surcharge applies to that purchase¹⁸. The bill can be substantial: on an additional property bought at the average UK house price of £292,000, the Stamp Duty cost would be £19,200³. The rules on when the higher rates do not apply, including for inherited shares and certain transfers, are covered in the guide to Stamp Duty higher rates on second homes and the page on surcharge exemptions.

Replacing your main home: the higher rate and the refund

The surcharge has a relief valve for people who are moving home rather than adding to a portfolio. Where HMRC views a buyer as replacing their main residence, even though they own an interest in another property, standard Stamp Duty rates apply rather than the higher rates¹⁹. The test looks back as well as forward: the legislation refers to a period of three years ending with the effective date of the transaction in which the purchaser, or their spouse or civil partner, disposed of the previous dwelling¹⁷.

Where the old home has not sold by completion, the buyer pays the higher rates and can reclaim the difference later. If you sell or give away your previous main home in the 3 years after you buy your new home, you can apply for a refund of the higher rate part of your SDLT bill²⁰. The same principle applies to let to buy: if you sell your original property, the one you are renting out, within three years, you can claim back the difference between what you paid and the normal home mover rates¹⁸.

The refund is claimed by applying online or in writing²⁰. HMRC's SDLT16 guidance lists what an application needs: your details, the main buyer's details if not your own, details of the property that attracted the higher rates including the effective date of purchase and the SDLT unique transaction reference number, details of the previous main home sold including the effective date of sale, address and buyer's name, the amount of tax paid, the amount to be repaid, and the bank account details of the payment recipient²¹. There is also a late window: you can still apply if you bought your new home on or after 1 January 2017, exceptional circumstances stopped the sale of the previous home, and the previous home has now been sold²¹. The guide to reclaiming the higher rates after the three-year window covers that route.

Non-UK residents pay a 2% surcharge

Non-UK residents pay an extra 2% on top of the normal rates. A 2% surcharge for Non-Resident Stamp Duty Land Tax was introduced on the purchase of properties by non-residents from 1 April 2021². Overseas-based buyers of residential properties in England and Northern Ireland must pay the surcharge of 2% on top of the normal rates⁵, and HMRC's refund guidance confirms the 2% surcharge for non-UK residents as a distinct part of the bill²⁰.

The surcharges stack. Overseas residents buying an investment property must pay Stamp Duty at 7% more than the standard rates for home movers, because the 2% non-resident surcharge applies on top of the 5% buy-to-let surcharge²². For an overseas buyer purchasing a main home to live in, the extra cost is the 2% surcharge alone.

The surcharge is not always final. If you meet certain residence requirements after your transaction, you may be able to apply for a refund of the 2% surcharge for non-UK residents²⁰. The detail of who counts as non-resident, and how the residence test is measured, is covered in the guide to the Stamp Duty surcharge for non-UK residents.

When Stamp Duty does not apply: gifts, inheritance and separation

Several common transactions attract no Stamp Duty and, in some cases, no return either. HMRC's guidance lists transactions that do not need a return: transactions where no money or other type of payment changes hands, property left to you in a will, and property transferred because of divorce or the dissolution of a civil partnership²³. The check on whether a return is needed confirms the same exclusion for property left in a will⁸.

Separation has its own treatment in the legislation. Under the higher rates rules, where a dwelling is transferred under a property adjustment order and the dwelling is the recipient's only or main residence, the transferor is treated as not holding the interest in the dwelling¹⁷. In plain terms, a divorce settlement that passes the family home from one spouse to the other does not leave the transferor counted as owning a property they no longer have. Transfers in connection with divorce or the dissolution of a civil partnership are also exempt from the separate Stamp Duty charged on documents, where the consideration given is not chargeable consideration²⁴.

Shared ownership and shared equity buyers pay on what they actually buy. Under Scotland's Open Market Shared Equity scheme, for example, you pay for your share of the home's price in the usual way, along with other costs such as legal costs, registration fees and any stamp duty²⁵. The guides to shared ownership in England, to paying Stamp Duty in stages on a shared ownership home and to the Stamp Duty reliefs cover the choices these buyers face.

Paying Stamp Duty and filing the return within 14 days

The deadline is tight and runs from completion. You must send the SDLT return and pay any tax within 14 days of the effective date of the transaction⁶, which is usually the date of completion³. In practice the tax is payable at the point of completion¹⁰ and will usually be handled by your solicitor²⁶.

How the return is sent depends on who is doing it. If you are not represented, you must use the SDLT1 paper return and send it to HMRC by post⁶. Most buyers are represented, and even if your representative sends the return, you are still responsible for making sure HMRC gets it on time and with the correct information⁶. That responsibility survives the conveyancer's involvement, and the page on what to do if your conveyancer fails to pay property tax covers where it goes wrong.

Refunds have their own timetable. You can apply for a refund if you are within one year of the filing date for your SDLT return, by applying online or in writing²⁰. HMRC has up to 9 months to make a compliance check on an amended return or claim²⁰, and a repayment is not an admission that the claim was right: even after a repayment has been made, HMRC has not agreed that the refund is due, and if you receive a repayment where the amount you claimed was not due, you must pay it back along with any interest due²⁰. HMRC will pay any refund to you unless you give permission for it to be paid to someone else, for example your solicitor or agent, and if you pay an agent to claim for you, you are still responsible for checking that your claim is correct²⁰.

Late payment: penalties and interest

HMRC charges a late filing penalty and interest if your SDLT return is not filed on time⁶. The 14 day deadline applies to the return and the payment together, so a return sent on time with the tax unpaid, or the tax paid with no return, each leave the buyer exposed to the same consequences.

The practical protection is to confirm, rather than assume, that completion has been handled. Because the buyer remains responsible for the return even when a solicitor files it⁶, a short check with the conveyancer after completion, confirming the return was sent and the tax paid within the window, is the simplest safeguard. The narrow guide to what happens if you don't pay Stamp Duty on time covers the position in detail, and the deadline to pay Stamp Duty page explains the effective date rules.

Will Stamp Duty change again?

Stamp Duty has been changed repeatedly, and the current rates are the product of recent reform rather than a long-settled rule. The thresholds in force now date from 1 April 2025, when thresholds for home movers, first-time buyers and second home buyers all decreased¹³, and the move to the slice structure itself only happened in 2014 for residential transactions and 2016 for non-residential and mixed transactions¹⁵. The additional property surcharge also rose to 5% across all bands from 1 April 2025.

The direction of travel across the UK has been divergence. Wales replaced SDLT with Land Transaction Tax from 1 April 2018⁷, and Scotland runs its own tax with its own reliefs, including a first-time buyer relief that exempts the first £175,000 of consideration rather than £300,000⁴. That means future changes in one nation no longer automatically follow changes in another, and a buyer in Carlisle and a buyer in Gretna face different systems for identical homes.

Rates and thresholds are set by Parliament and can change at any Budget. The Commons Library research briefing on SDLT tracks the structure and history of the tax for buyers who want the full picture¹, and the guides to Land and Buildings Transaction Tax and Land Transaction Tax cover the rules in the other two nations. Anyone budgeting for a purchase should check the thresholds that apply at their expected completion date, not the ones that applied when they started looking.