Stamp Duty UK 2026 — The Complete Guide
Stamp Duty Land Tax (SDLT) is the tax payable when you buy property in England and Northern Ireland above a certain threshold. In Scotland the equivalent is Land and Buildings Transaction Tax (LBTT), and in Wales it is Land Transaction Tax (LTT). This guide focuses on SDLT in England.
Stamp duty is often the largest transaction cost in a property purchase after the deposit itself. On a £400,000 home, the bill can reach £10,000 or more. Understanding what you owe before you make an offer is essential for accurate financial planning.
How SDLT Works: Marginal Rates
SDLT is not a flat rate on the whole purchase price. Like income tax, it is marginal — each threshold is applied only to the portion of the price that falls within that band.
Standard SDLT Rates 2026
| Portion of Purchase Price | SDLT Rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001 to £250,000 | 2% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1,500,000 | 10% |
| Above £1,500,000 | 12% |
Worked example — £350,000 purchase at standard rates:
- £0 to £125,000 at 0%: £0
- £125,001 to £250,000 at 2% on £125,000: £2,500
- £250,001 to £350,000 at 5% on £100,000: £5,000
- Total SDLT: £7,500
First-Time Buyer Relief
First-time buyers pay preferential SDLT rates on purchases up to £500,000:
| Portion of Price | First-Time Buyer Rate |
|---|---|
| Up to £300,000 | 0% |
| £300,001 to £500,000 | 5% |
| Above £500,000 | Standard rates apply — no relief |
Worked example — first-time buyer at £350,000:
- £0 to £300,000 at 0%: £0
- £300,001 to £350,000 at 5% on £50,000: £2,500
- Total SDLT: £2,500 versus £7,500 at standard rates — a saving of £5,000
First-time buyer relief applies when all purchasers on the deed have never previously owned a residential property anywhere in the world. This includes inherited properties. If even one buyer on a joint purchase has previously owned property, neither buyer qualifies for the relief.
The Second Home Surcharge
Purchasing an additional residential property — a buy-to-let, holiday home or second residence — attracts a 5% surcharge on top of standard rates across the entire purchase price.
| Portion of Price | Second Home Rate |
|---|---|
| Up to £125,000 | 5% |
| £125,001 to £250,000 | 7% |
| £250,001 to £925,000 | 10% |
| £925,001 to £1,500,000 | 15% |
| Above £1,500,000 | 17% |
Worked example — buy-to-let purchase at £250,000:
- £0 to £125,000 at 5%: £6,250
- £125,001 to £250,000 at 7% on £125,000: £8,750
- Total SDLT: £15,000
The surcharge makes buy-to-let significantly less attractive for investors already owning property. On a £250,000 purchase, the SDLT alone is £15,000 — equivalent to two to three years of net rental income at typical yields.
When Is Stamp Duty Paid?
SDLT must be paid within 14 days of completion. Your solicitor or conveyancer handles this as part of the completion process, collecting the funds from you alongside the purchase price. Failure to pay on time results in interest charges and potential penalties from HMRC, though in practice your conveyancer ensures this is handled correctly.
SDLT on New Builds
New build properties are subject to standard SDLT rates. Some developers offer SDLT contributions as a purchase incentive, where the developer pays your stamp duty on your behalf. This reduces your upfront costs but does not change your legal tax liability.
Be cautious: developer SDLT contributions are sometimes factored into an inflated asking price. Always compare comparable resale properties before assuming a new build incentive represents genuine value.
SDLT and Shared Ownership
Shared Ownership buyers can elect to pay SDLT on either the share they are purchasing or on the full market value of the property. Paying on the full value upfront means no further SDLT when you staircase to higher ownership percentages later. For properties where you intend to staircase to 100% eventually, paying SDLT on the full value upfront can be more efficient over the long term.
Common SDLT Traps
Joint purchases with one previous owner. Both first-time buyer relief and the second home surcharge depend on the ownership history of all parties on the deed. Verify the history of every buyer before assuming any relief applies.
Inherited property. Inheriting a share of a property does not automatically disqualify you from first-time buyer relief, but the rules are nuanced and specific to the circumstances. Always seek legal advice.
Linked transactions. Buying multiple properties from the same seller in a single transaction may result in them being treated as a single linked transaction for SDLT purposes, potentially at higher rates.
Claiming the wrong relief. SDLT returns are not automatically reviewed by HMRC for accuracy. An error — whether overpaying or underpaying — is your responsibility to correct. Always use a qualified conveyancer who handles SDLT submissions regularly.
SDLT rates and thresholds are set by the government and subject to change at each Budget. Always verify the current rates at GOV.UK before completing a property purchase.