You’ve found the place. Offer accepted. Solicitor instructed. Then someone mentions the stamp duty bill and a number arrives that you weren’t quite ready for. It happens more often than you’d think — not because buyers are careless, but because stamp duty sits in that awkward category of costs people know exist without really knowing how they work. So here’s how it actually works.
What Is Stamp Duty Land Tax?
Stamp duty land tax — SDLT — is a tax paid to HMRC when you buy a property in England or Northern Ireland above a certain price. You pay it on completion, and your solicitor handles the submission, though the cost is yours. Scotland and Wales operate their own equivalents: Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT) respectively. This post covers England only.
The name is an anachronism. There’s no actual stamp, no deed being pressed with wax. It’s simply a purchase tax, calculated as a percentage of what you pay for a property, applied in bands — much like income tax. You don’t pay the higher rate on the entire purchase price, only on the portion that falls within each band.
How Is Stamp Duty Calculated?
You pay each rate only on the slice of the purchase price that falls within that band, not on the total. Think of it like income tax brackets: the rate changes as the price crosses each threshold, but only the portion above that threshold is taxed at the higher rate.
The current standard rates for residential property in England are:
| Purchase price band | Standard rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001 – £250,000 | 2% |
| £250,001 – £925,000 | 5% |
| £925,001 – £1,500,000 | 10% |
| Above £1,500,000 | 12% |
So on a £400,000 purchase, the calculation runs: nothing on the first £125,000, 2% on the next £125,000 (£2,500), and 5% on the remaining £150,000 (£7,500) — a total of £10,000. HMRC’s official SDLT guidance also includes a calculator if you want to check a specific figure.
Calculate Your Stamp Duty
Rather than working through the bands by hand, use the calculator below — enter the purchase price and select your buyer type to see exactly what you’d owe, broken down by band.
| Band | Rate | Tax |
|---|
First-time buyer relief applies only up to £500,000. Above that, standard rates apply to the full price with no relief.
Do First-Time Buyers Pay Less?
First-time buyers pay no stamp duty on the first £300,000 of a property’s price, provided the property costs no more than £500,000. This relief applies to buyers who have never owned a residential property anywhere in the world — not just in the UK.
On a £500,000 purchase, a first-time buyer pays 5% on the £200,000 above the £300,000 threshold — a bill of £10,000, compared to £15,000 for a standard buyer. On purchases below £300,000, first-time buyers pay nothing at all. If the property costs more than £500,000, the relief disappears entirely and standard rates apply from the first pound.
What About Second Homes and Buy-to-Let Properties?
Anyone buying an additional residential property — whether a buy-to-let, a holiday home, or a second home — pays a 3% surcharge on top of the standard rates across every band. It applies from the first pound.
| Purchase price band | Standard rate | Additional property |
|---|---|---|
| Up to £125,000 | 0% | 3% |
| £125,001 – £250,000 | 2% | 5% |
| £250,001 – £925,000 | 5% | 8% |
| £925,001 – £1,500,000 | 10% | 13% |
| Above £1,500,000 | 12% | 15% |
If you’re buying a new home before selling your existing one, you’ll trigger the surcharge at completion. You can reclaim it if you sell your previous main residence within three years — but you have to apply for the refund; it won’t happen automatically.
Does Stamp Duty Apply to Non-UK Buyers?
Non-UK residents buying residential property in England pay an additional 2% surcharge on top of the standard rates — or on top of the additional property surcharge if that also applies. This came into effect in April 2021 and applies regardless of whether you’re buying as a main residence or an investment. Residency for SDLT purposes is assessed using a specific test; it’s worth taking advice if you’ve spent time outside the UK in the year before completion.
When Is Stamp Duty Due?
SDLT must be paid within 14 days of completion. Your solicitor will almost always handle the payment directly, deducting it from the funds you send them ahead of completion. The 14-day window is strict — late filing attracts automatic penalties and interest from HMRC. In practice, if your conveyancer is on the ball, you won’t need to think about the deadline at all. But it’s worth confirming who’s responsible for submission before completion day.
Can You Add Stamp Duty to Your Mortgage?
Most lenders won’t let you borrow to cover stamp duty — it’s considered a purchase cost, not part of the property’s value. You’ll typically need the funds available in cash. A small number of lenders allow a slightly higher loan relative to purchase price if there are valid reasons, but this isn’t a mainstream route and shouldn’t be planned around. Budget for stamp duty as a cash cost from the outset.
In Summary
Stamp duty land tax applies in England and Northern Ireland to residential purchases above £125,000, calculated in bands rather than as a flat rate on the full price. First-time buyers benefit from meaningful relief, paying nothing on the first £300,000 — up to a maximum property value of £500,000, above which standard rates apply in full. Buyers of additional properties pay a 3% surcharge across every band, and non-UK residents pay a further 2% on top. You have 14 days from completion to pay, and your solicitor handles the submission. Stamp duty must be funded from cash — it cannot routinely be added to a mortgage. Understanding the bill before you make an offer is far better than discovering it afterwards.
Frequently Asked Questions
What is stamp duty land tax?
Stamp duty land tax (SDLT) is a tax charged by HMRC on the purchase of property and land in England and Northern Ireland. It’s calculated in bands on the purchase price and paid at completion, with your solicitor typically submitting the return on your behalf.
How much stamp duty will I pay on a £300,000 property?
A standard buyer purchasing a £300,000 property would pay 2% on the £125,000 between £125,001 and £250,000 (£2,500), plus 5% on the remaining £50,000 (£2,500) — a total of £5,000. A first-time buyer purchasing the same property would pay nothing, as £300,000 is exactly the first-time buyer nil-rate threshold.
Do first-time buyers pay stamp duty?
First-time buyers pay no stamp duty on properties priced up to £300,000, and a reduced rate above that up to £500,000. If the property costs more than £500,000, the standard rates apply in full with no relief.
What is the additional property stamp duty surcharge?
Buyers purchasing a second or subsequent residential property — including buy-to-let investments and holiday homes — pay an extra 3% on top of the standard SDLT rates across every band, starting from the first pound.
Can I reclaim stamp duty if I sell my old home?
If you pay the 3% additional property surcharge because you completed on a new home before selling your previous main residence, you can apply to HMRC for a refund — but only if you sell the previous property within three years of completing on the new one. You must claim the refund actively; it is not issued automatically.
Does stamp duty apply to non-UK residents?
Yes. Non-UK residents buying residential property in England pay an additional 2% surcharge on top of whatever standard or additional-property rates already apply. Residency for this purpose is assessed under a specific HMRC test based on your presence in the UK in the year before completion.
When do I have to pay stamp duty?
SDLT must be paid within 14 days of completion. Your solicitor will normally handle both the payment and the HMRC return as part of the conveyancing process, using funds you transfer to them before completion day.
Can stamp duty be added to a mortgage?
In most cases, no. Lenders treat stamp duty as a transaction cost rather than part of the property’s value, so it sits outside the mortgage. You should plan to fund it from cash savings alongside your deposit and legal fees.
Is stamp duty different in Scotland and Wales?
Yes. Scotland charges Land and Buildings Transaction Tax (LBTT) and Wales charges Land Transaction Tax (LTT). Both operate on similar banded principles but with different thresholds and rates. This post covers England only — if you’re buying in Scotland or Wales, seek advice specific to those regimes.
What happens if stamp duty is paid late?
If the SDLT return is filed after the 14-day deadline, HMRC applies automatic penalties and charges interest on any unpaid tax. A competent conveyancer will always ensure payment is made on time, but it’s worth confirming the arrangement with your solicitor before completion.
This post is for general information only and does not constitute financial or legal advice. Stamp duty rules change — sometimes with little notice — and your personal situation will affect what you owe. Always take independent advice before making a property purchase decision.
If you’re buying in London and want to get your numbers right before you offer, we’re happy to talk it through.
