What Is Stamp Duty in the UK? A Complete Guide for Homebuyers
- Jamie Reid - Credit, Loans & Everyday Money Writer
- Feb 18
- 5 min read
Updated: Apr 9
If you’re buying property in the UK, one of the biggest additional costs you’ll encounter is Stamp Duty Land Tax (SDLT) — commonly known as stamp duty. But what exactly is it, who pays it, and how much will it add to your purchase?
Whether you're a first-time buyer, moving home, or purchasing a second property, understanding how stamp duty works can help you plan your budget, avoid surprises, and potentially save thousands.
This guide explains everything you need to know about stamp duty in the UK — including how it's calculated, current thresholds, exemptions, and strategies to minimise your bill.
What Is Stamp Duty?
Stamp Duty Land Tax (SDLT) is a tax paid to HMRC when you buy property or land in England or Northern Ireland. Different rules apply in Scotland (Land and Buildings Transaction Tax) and Wales (Land Transaction Tax).
Stamp duty is charged on the purchase price of residential and commercial properties above a certain threshold. It must be paid within 14 days of the transaction completing — usually handled by your solicitor.
Who Has to Pay Stamp Duty?
Stamp duty is paid by the buyer, not the seller. You’ll need to pay it if you are:
Buying a home over the threshold amount
Purchasing a second property or buy-to-let investment
Acquiring a shared ownership property
Transferring ownership of property in some divorce or inheritance situations
If you’re a first-time buyer, you may be eligible for relief — more on that shortly.
When Do You Pay Stamp Duty?
Stamp duty becomes payable when your property purchase is completed. Your conveyancer will usually file the SDLT return and pay the tax on your behalf. You can also do this yourself through HMRC.
You must pay it within 14 days of completion — failing to do so can result in penalties and interest charges.
How Is Stamp Duty Calculated?
Stamp duty is charged in bands, like income tax. You only pay the percentage on the portion of the property price within each band.
Here’s how the system works for residential property in England and Northern Ireland:
Up to £250,000 – 0%
£250,001 to £925,000 – 5%
£925,001 to £1.5 million – 10%
Above £1.5 million – 12%
So if you buy a home for £300,000, you’d pay:
0% on the first £250,000
5% on the remaining £50,000 = £2,500 stamp duty
You can use HMRC’s online calculator to check your exact bill:
Stamp Duty for First-Time Buyers
First-time buyers in England and Northern Ireland do not pay stamp duty on the first £425,000 of a property — provided the total purchase price is £625,000 or less.
Example:
Property price: £400,000
Stamp duty due: £0
If you’re buying jointly, both buyers must be first-time buyers to qualify for the exemption.
Read our guide on: How to Start Investing in the UK with £100
Higher Stamp Duty Rates for Second Homes and Buy-to-Let
If you're buying an additional residential property (e.g. second home, buy-to-let), you’ll usually pay a 3% surcharge on top of standard stamp duty rates.
This applies even if your main residence is abroad or you're buying through a company.
Example:
Property price: £300,000
Standard SDLT: £2,500
3% surcharge: £9,000
Total SDLT = £11,500
There are exemptions in limited cases (e.g. if you're replacing your main residence).
Stamp Duty in Scotland and Wales
Stamp duty doesn't apply in:
Scotland – Instead, you’ll pay Land and Buildings Transaction Tax (LBTT)
More info: https://www.revenue.scot
Wales – You’ll pay Land Transaction Tax (LTT)
More info: https://gov.wales/land-transaction-tax
Thresholds, rates, and rules vary, so check the official websites if buying in these areas.
Exemptions and Special Circumstances
You may not have to pay stamp duty in some circumstances, such as:
Property purchase under £250,000 (standard buyers) or under £425,000 (first-time buyers)
Transfers of property due to divorce or separation
Gifting property with no mortgage involved
Some Right to Buy purchases
Transfers due to inheritance
Always confirm with your solicitor or HMRC before assuming exemption.
How to Reduce Your Stamp Duty Bill
While you can’t completely avoid stamp duty in most cases, here are some ways to reduce what you pay:
1. Buy Below the Threshold
If your budget is close to the £250,000 or £425,000 threshold, consider negotiating the price down.
2. Claim First-Time Buyer Relief
If eligible, ensure your solicitor applies this during the SDLT return submission.
3. Time Your Purchase Strategically
In rare cases, government reliefs or holidays may lower stamp duty temporarily. Your solicitor or estate agent will be aware of these.
4. Transfer Property Between Spouses
There’s no stamp duty between legally married spouses or civil partners when transferring ownership.
A Unique Tip: Stamp Duty on Fixtures and Fittings
Stamp duty only applies to the property itself, not removable items like carpets, curtains, or appliances. If you negotiate the sale to include these, ask your solicitor to itemise them separately.
For example, if £5,000 of the sale price covers white goods or fitted wardrobes, and it’s clearly listed, that amount can be deducted from the property value for SDLT purposes — potentially saving you hundreds.
Just be sure the valuation is reasonable and defensible.
FAQs
What is the current stamp duty threshold in England?
The standard threshold is £250,000. First-time buyers benefit from a higher threshold of £425,000 (on homes worth up to £625,000).
Do I need to pay stamp duty if I inherit a property?
No, stamp duty is not payable on inherited properties — but other taxes, like Inheritance Tax, may apply depending on the estate.
Is stamp duty different for leasehold properties?
No — stamp duty applies to both leasehold and freehold purchases. However, there may be additional calculations if you pay ground rent or premiums.
Can I add stamp duty to my mortgage?
Some lenders may allow this, but it increases your loan and interest charges. It’s generally advised to pay it upfront.
Can I claim stamp duty back if I change my mind?
If a sale falls through before completion, you won’t owe stamp duty. If you overpay or are wrongly charged, you can claim a refund via HMRC.
Final Thoughts
Stamp duty is one of the most significant upfront costs when buying a property in the UK — but it’s also one of the least understood. While most buyers rely on their solicitor to handle the paperwork, knowing how the tax works helps you budget more accurately, avoid penalties, and even spot opportunities to reduce what you owe.
Whether you’re a first-time buyer or a seasoned landlord, always check your eligibility for reliefs, use official calculators, and work with a conveyancer who ensures the SDLT return is submitted correctly and on time.
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