What is stamp duty?

Stamp duty land tax (SDLT) is the tax that must be paid when you purchase a property or a piece of land. The amount of money required for stamp duty depends on the overall price of the property as well as factors like whether it is residential or non-residential and whether or not you are a first-time buyer.

Stamp duty rates & thresholds

The following rates apply to England.

Stamp duty for first-time buyers

Effective from 1st April 2025:

Buying your first property:

If you are buying your first property, you are eligible for tax relief up to the value of £500,000. This means that you will pay:

• 0% stamp duty up to £300,000
• 5% stamp duty between £300,001 and £500,000

If the price is over £500,000, you are not eligible to claim the SDLT relief.

How to calculate:

If you are a first-time buyer and buy a property for £450,000, you will pay:

• 0% up to £300,000 = £0
• 5% of the remaining £150,000 = £7,500
• Total SDLT = £7,500

Stamp duty for buyers replacing primary residence

Effective from 1st April 2025:

Replacing your main residence:

When you purchase a new primary residence to replace your existing property, you are exempt from the additional 5% stamp duty rate, provided your previous main home has been sold before completion. If you buy a new main residence without selling the previous one, you will incur higher stamp duty charges due to owning two properties simultaneously.

However, there is an opportunity to request a refund on the extra stamp duty paid if your former primary residence is sold within three years. For more information, visit gov.uk.

How to calculate

If you buy a new main residence for £500,000, you will pay:

• 0% up to £125,000 = £0
• 2% on £125,001 to £250,000 = £2,500
• 5% on £250,001 to £500,000 = £12,500
• Total SDLT = £15,000

Stamp duty for second home buyers or buy-to-let landlords

Effective from 1st April 2025:

If you buy a property as a second home or a buy-to-let, you will incur a 5% surcharge on the existing rates.

How to calculate:

If you buy a property for £500,000, you will pay:

• 5% on £0 to £125,000 = £6,250
• 7% on £125,001 to £250,000 = £8,750
• 10% on £250,001 to £500,000 = £25,000
• Total SDLT = £40,000

Stamp duty for non-UK residents

Effective from 1st April 2025:

Non-UK residents must add an additional 2% surcharge to the applicable SDLT rates listed above. For stamp duty purposes, you are considered a non-UK resident if you have not spent at least 183 days (approximately 6 months) in the UK in the 12 months leading up to your property purchase.

For more information, see the gov.uk website.

How to calculate:

If you buy a property for £500,000 (main residence) as a non-UK resident, you will pay the standard rates plus 2% on the whole price:

• 0% up to £125,000 = £0
• 2% on £125,001 to £250,000 = £2,500
• 5% on £250,001 to £500,000 = £12,500
• 2% surcharge on £500,000 = £10,000
• Total SDLT = £25,000

How to pay stamp duty

Understanding how to pay stamp duty is crucial. Follow this process:

• Calculation of SDLT: Your solicitor, conveyancer, or legal advisor will usually calculate the amount due based on the purchase price.
• Filing SDLT Return: An SDLT return must be filed with HMRC, even if no SDLT is due. It must be submitted within 14 days of completion.
• Making Payment: Payment methods include direct bank transfer, cheque, or an online system depending on your solicitor's services.
• Confirmation: Once filed and paid, HMRC issues a SDLT5 certificate, required for Land Registry purposes.

Important considerations:

• Who pays? The buyer is responsible, although usually managed by the solicitor.
• Late payment penalties: Penalties and interest may apply for late submissions.
• Refunds and adjustments: Refunds can be requested if you overpay or meet specific eligibility criteria.