Stamp duty explained: how SDLT works

Stamp duty, formally Stamp Duty Land Tax or SDLT, is a tax paid by the buyer when property or land is bought in England or Northern Ireland. It applies to freehold purchases, new leases, the assignment of existing leases and some transfers of ownership, and it is collected by HMRC after completion through an SDLT return.

The tax was introduced by the Finance Act 2003, replacing the older stamp duty on property documents, and it is still widely called stamp duty. It is a separate cost from the price, the deposit, the conveyancer's fees and any mortgage fees, and it usually has to be paid from the buyer's own money on the day of completion. Because the amount can be large, it is one of the main costs to plan for alongside the deposit when a buyer works out what they can afford, and it can affect the price a buyer is willing to offer in the first place.

The buyer pays stamp duty, not the seller. Individuals, couples, companies, trusts and partnerships can all be liable, and the rules differ for each. Whether tax is due depends on the price or other consideration given, the type of property, where it is, and the circumstances of the buyer, including what else they already own.

Buyers who will own more than one home, buyers who are not UK resident and companies buying homes all face extra charges. First-time buyers buying a main home below a price cap pay less, and some transfers, such as gifts with no mortgage and transfers on divorce, are exempt altogether. A conveyancer usually works out the tax as part of the purchase, but buyers can check the figure themselves before exchange so there are no surprises close to completion.

Stamp duty is a tax on the transaction, not on owning the property, so it is paid once per purchase rather than every year. Council tax, business rates and any income tax on rent are separate charges with their own rules, and none of them is affected by how much stamp duty was paid when the property was bought.

Stamp duty is charged in slices. Each band of the price has its own rate, and a rate applies only to the part of the price inside that band. The bill is the total of the tax on every slice, so moving into a higher band only raises the tax on the part of the price above the threshold.

For a buyer who will own one home, the residential bands run from zero up to £125,000 to 12% on the part above £1.5 million (GOV.UK, accessed 20 Oct 2026). The full set of bands, how lease premiums are treated and how the thresholds have changed over time are explained in the guide to stamp duty rates and thresholds. The effective date of the purchase, usually completion, decides which bands apply, so a change to the rates between exchange and completion can change the amount due.

The quickest way to see the tax on a purchase is a calculator that applies the current bands, reliefs and surcharges to the price. The result is an estimate based on the details entered, and the conveyancer confirms the final figure on the SDLT return before it is filed and paid on the buyer's behalf.

Separate calculators cover residential purchases, first-time buyers, second homes, buy-to-let and company purchases, non-resident buyers, commercial property, and the Scottish and Welsh taxes. Each one shows the tax slice by slice, so buyers can see how a relief or surcharge changes the result. The main stamp duty calculator brings these together and links to each typed version. Comparing two or three prices side by side shows where a threshold falls and how much of the bill comes from the top slice of the price.

A calculator cannot know every detail of a transaction, such as a linked purchase, a lease with variable rent or a claim to a relief with strict conditions. Where any of these apply, the figure is a starting point, and the conveyancer or a tax adviser confirms the amount before the return is filed. Keeping the price, dates and ownership details to hand makes that check quicker.

First-time buyers in England and Northern Ireland can claim relief that removes or reduces stamp duty on a first home, as long as every buyer has never owned a home anywhere in the world, the home will be their main residence and the price is below the cap. The relief is claimed on the SDLT return.

Above the cap no relief is available, and the standard bands apply to the whole price. Joint purchases where one buyer has owned a home before also pay the standard rates, even if the other buyer has never owned property. Shared ownership buyers can usually use the relief, with a choice about how the tax is paid. Inheriting a share of a home, or owning a home abroad, also counts as having owned one, which surprises some buyers.

The rules on who counts as a first-time buyer, the price cap and how shared ownership is treated are set out in the dedicated guide for first-time buyers. Buyers close to the cap often check the figure early, because a small change in price can decide whether the relief applies at all.

Buyers who will own more than one home at the end of the day of purchase usually pay the higher rates for additional dwellings, a surcharge added to every band. This covers second homes, holiday homes and most buy-to-let purchases, and it applies to homes owned anywhere in the world, including shares of homes.

Companies pay the higher rates on any home they buy and can face a flat rate on expensive homes unless a relief applies. Buyers replacing a main home can avoid the surcharge, or reclaim it if the old home is sold later within the time allowed. The detail for landlords, including moving properties into a company, is in the guide to buy-to-let and limited company stamp duty. Married couples and civil partners are treated as one unit, so a property owned by either of them counts towards the total.

Non-residential property, including shops, offices, industrial units, farmland and mixed-use buildings, has its own SDLT bands, which are lower at the top than the residential bands. The surcharges for additional homes and non-resident buyers do not apply, and six or more homes bought together can be taxed at non-residential rates.

New leases can be taxed on the premium and on the rent over the term, and leases with variable rent may need further returns as the rent changes. Land bought on its own is usually non-residential, unless it forms part of the garden or grounds of a home. Commercial buyers also need to plan for later returns on overage or deferred payments, which can continue for some years after the purchase.

Because commercial deals are often structured in more complex ways, with options, conditional contracts or several linked purchases, the effective date and the amount charged are not always obvious. Linked transactions between the same buyer and seller are added together, which can push the combined price into a higher band than each part on its own.

Several reliefs and exemptions reduce or remove stamp duty. They include first-time buyer relief, gifts with no chargeable consideration, property inherited under a will, transfers on divorce or separation, some transfers of equity, charities relief and group relief for companies. Each has conditions, and most reliefs must be claimed on the SDLT return.

Some reliefs have ended, including multiple dwellings relief, so the completion date matters when checking what was available. A relief claimed wrongly can be withdrawn later, with the tax, interest and penalties then due. The guide to SDLT reliefs and exemptions explains the main ones and how each is claimed. Transfers between unmarried partners have no special exemption, so the share of any mortgage taken on can create a charge.

Most purchases need an SDLT return, filed with HMRC and paid soon after completion. The conveyancer usually handles both, using funds collected from the buyer before completion. Late returns and late payment lead to penalties and interest, and HMRC issues a certificate that the Land Registry needs to register the new owner.

Mistakes can usually be corrected by amending the return within a set period, and older overpayments can be reclaimed through a formal claim. The most common refund is of the higher rates, once a previous main home has been sold within the time allowed. Buyers contacted by refund agents can check eligibility on GOV.UK first, because the buyer stays responsible for any claim made in their name. Paying and filing are covered in the guide to paying stamp duty.

Stamp Duty Land Tax does not apply in Scotland or Wales. Scotland has Land and Buildings Transaction Tax, collected by Revenue Scotland, and Wales has Land Transaction Tax, collected by the Welsh Revenue Authority. Each tax has its own bands, reliefs and surcharges, and its own rules for returns and refunds after completion.

Buyers moving across the border should check which tax applies to the property they are buying, not where they live now. Calculators for the Scottish and Welsh taxes apply each country's own bands, including the surcharges on additional homes. The surcharge rules in Scotland and Wales are set separately and can differ from the English rules for the same buyer.

Northern Ireland uses the same SDLT rules as England, so buyers there follow the guides in this section. The Isle of Man and the Channel Islands have their own systems and are outside the scope of SDLT, LBTT and LTT altogether.