What is Stamp Duty Land Tax (SDLT)?
Stamp Duty Land Tax (SDLT) is a UK property purchase tax paid by the buyer on completion. It is charged on a slab basis at progressive rates - 0% up to GBP 125,000, 2% to GBP 250,000, 5% to GBP 925,000, 10% to GBP 1.5m, 12% above. First-time buyers and additional-property buyers face different schedules.
Detailed definition
Stamp Duty has existed in the UK since 1694, when William III introduced it as a temporary war tax to fund the Nine Years' War. It outlived the war by three centuries and was replaced by the modern Stamp Duty Land Tax (SDLT) in the Finance Act 2003. It became a slab-style progressive tax in the Autumn Statement of December 2014, removing the cliff-edge effect of the old whole-price tax under which a GBP 250,001 purchase paid 3% on the entire price while a GBP 250,000 purchase paid only 1%. Today each band applies only to the slice of price within that band.
The current 2025/26 schedule (after temporary thresholds expired in March 2025) is: 0% up to GBP 125,000, 2% on the next GBP 125,000 (to GBP 250,000), 5% to GBP 925,000, 10% to GBP 1.5 million, and 12% above. First-time buyers get a more generous schedule: 0% to GBP 300,000 and 5% on the slice to GBP 500,000, but lose all relief on a purchase priced above GBP 500,000 (the relief is a cliff, not a slab). Mixed-use property uses a separate non-residential schedule that caps at 5%.
Buyers of additional properties (second homes, buy-to-let) pay a 5% surcharge on top of standard rates from 31 October 2024 (increased from 3% by the Autumn Budget 2024). Non-UK residents pay an extra 2% surcharge. Companies buying residential property over GBP 500,000 pay a flat 17% rate (the Annual Tax on Enveloped Dwellings regime), with limited exceptions for property-rental, property-development and other trading businesses. SDLT does not apply in Scotland (LBTT) or Wales (LTT), which have similar but different schedules; an LBTT 0% band runs to GBP 145,000 and an LTT 0% band runs to GBP 225,000, both with a 4% Additional Dwelling Supplement and a 6% Higher Residential Rate respectively for second homes.
Formula
SDLT = Sum across bands of (Price in band) x (Band Rate)
- Price in band = The portion of the purchase price that falls in each band
- Band Rate = The percentage rate for that band (0% / 2% / 5% / 10% / 12% from April 2025)
Worked example
Suppose you buy a GBP 500,000 home in England in 2025/26 as a non-first-time buyer and it is your only property.
- Band 1: GBP 0 to GBP 125,000 at 0%: GBP 0
- Band 2: GBP 125,001 to GBP 250,000 at 2%: GBP 125,000 x 2% = GBP 2,500
- Band 3: GBP 250,001 to GBP 500,000 at 5%: GBP 250,000 x 5% = GBP 12,500
- Bands 4 and 5: Not used - price below thresholds
- Total SDLT: GBP 0 + GBP 2,500 + GBP 12,500 = GBP 15,000
Related terms
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Frequently asked questions
What are the 2025/26 SDLT rates?
Standard rates from April 2025: 0% up to GBP 125,000, 2% to GBP 250,000, 5% to GBP 925,000, 10% to GBP 1.5m, 12% above. First-time buyers: 0% to GBP 300,000 and 5% to GBP 500,000.
Do first-time buyers pay stamp duty?
First-time buyers pay 0% SDLT on the first GBP 300,000 of a home priced up to GBP 500,000. Above GBP 500,000, the standard schedule applies in full - no relief at all.
Is there a stamp duty surcharge on second homes?
Yes. From October 2024, buyers of additional residential properties pay a 5% surcharge on top of the standard rates (raised from 3%). Non-UK residents pay an extra 2% surcharge.
When is stamp duty due?
SDLT must be paid within 14 days of completion. Your conveyancer normally submits the SDLT return and pays HMRC on your behalf using the funds you transfer for completion.
Does stamp duty apply in Scotland and Wales?
No. Scotland uses Land and Buildings Transaction Tax (LBTT) with a 0% band up to GBP 145,000. Wales uses Land Transaction Tax (LTT) with a 0% band up to GBP 225,000. Both have their own band schedules.
Can I add stamp duty to my mortgage?
Most lenders will not lend against SDLT directly. You must pay it from your own funds at completion, which is why it should be planned as part of total cash needed for the move (deposit + SDLT + fees).
How does UK SDLT compare with Indian stamp duty?
India levies stamp duty at the state level under the Indian Stamp Act 1899 and individual state amendments. Rates in 2026 range from 4% (Karnataka women buyers) to 7% (Maharashtra metro buyers), applied to the higher of agreement value or government ready reckoner / circle rate. Registration fee adds another 1%. Unlike UK SDLT, Indian stamp duty is paid before registration at the Sub-Registrar, and unregistered sale deeds are inadmissible as evidence.
Can I claim SDLT back if a property purchase falls through?
If you have not yet completed, no SDLT is due. If you completed and then unwound the transaction within 12 months, HMRC may allow a refund via the SDLT1 amendment process. For the second-home 5% surcharge, you can claim a refund within 3 years (extended to 12 months from the sale of your previous main residence) if your old main home sells after the new one completes.