Stamp Duty Land Tax: A Plain-English Guide for UK Buyers
How much you'll pay, when you pay it, and what reliefs are available
Stamp Duty Land Tax (SDLT) is one of the most misunderstood costs in buying a home. When we were buying, we had no idea how the bands worked and assumed we'd owe far more than we actually did - it caused weeks of unnecessary stress. Here's the clear breakdown we wish someone had given us.
What is Stamp Duty?
Stamp Duty Land Tax is a tax paid by the buyer on the purchase of residential property in England and Northern Ireland. (Scotland uses Land and Buildings Transaction Tax, and Wales uses Land Transaction Tax - the rates differ slightly.)
It's paid after completion through your solicitor, who will file the SDLT return and payment to HMRC. You have 14 days from completion to pay.
Current SDLT rates (England - from April 2025)
SDLT is charged on a tiered basis - like income tax, you only pay the rate on the portion of the price within each band:
• £0-£125,000: 0% • £125,001-£250,000: 2% • £250,001-£925,000: 5% • £925,001-£1,500,000: 10% • Over £1,500,000: 12%
So on a £350,000 property: 0% on the first £125,000, 2% on the next £125,000 (£2,500), then 5% on the £100,000 above £250,000 (£5,000) = £7,500 total SDLT.
- Rates and thresholds shown are correct as of the date of this article and can change at any Budget - always check the current position on gov.uk
- HMRC has its own SDLT calculator at gov.uk/stamp-duty-land-tax/overview
- Thresholds can change in each Budget - the latest rates are published on gov.uk
First-time buyer relief
If you are a first-time buyer purchasing a property up to £500,000, you benefit from first-time buyer relief:
• £0-£300,000: 0% (no SDLT) • £300,001-£500,000: 5%
On a £400,000 property as a first-time buyer, you pay 5% on the £100,000 above £300,000 = £5,000. On a £500,000 property, you pay 5% on the £200,000 above £300,000 = £10,000.
One thing that caught us off guard: the £500,000 threshold is a cliff edge, not a band. If the property costs £500,001, you lose all first-time buyer relief and pay standard rates on the full amount.
Properties over £500,000 receive no first-time buyer relief and standard rates apply.
The 5% surcharge - second homes and buy-to-let
If you already own a residential property (anywhere in the world), you pay an additional 5% surcharge on the full purchase price (where the price is £40,000 or more). This applies to second homes and buy-to-let purchases.
Note: if you are replacing your main residence - selling your existing home and buying a new one - the surcharge does not apply, even if there is a gap between the two transactions, provided you complete both within certain HMRC timeframes.
When is SDLT paid?
Your solicitor will file the SDLT return and arrange payment to HMRC within 14 days of completion. The amount is typically clearly itemised in the financial statement your solicitor sends you before completion, so you can confirm the figure before the day itself.
Key takeaways
- 1SDLT is a tiered tax - you only pay each rate on the portion within that band
- 2First-time buyers pay nothing on the first £300,000 (if total price is under £500,000)
- 3A 5% surcharge applies to second homes and buy-to-let purchases
- 4Your solicitor arranges payment after completion - it's not paid on the day
- 5The latest rates are published on gov.uk as thresholds can change
General information only. This article is for educational purposes and does not constitute legal, financial, surveying or tax advice. Every property purchase is different - always consult a qualified solicitor, mortgage adviser or surveyor before making decisions. Home Ready Guide Limited is not FCA authorised.
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