Stamp duty is a tax paid by the buyer on property purchases, and varies depending on property value and buyer circumstances.
It applies to the majority of property purchases, and can add a significant amount to the overall cost of a purchase. In fact, stamp duty is often the most expensive part of conveyancing fees.
Starting from the 1st of April 2025, a few key thresholds for the SDLT have been reduced.
This guide covers all you need to know about stamp duty, including recent changes, second property surcharges, first-time buyer information and answers any questions you may have.
What is Stamp Duty Land Tax?
What is Stamp Duty Land Tax?
Stamp Duty Land Tax(SDLT) or stamp duty for short, is a tax paid by property buyers in England and Northern Ireland to Her Majesty's Revenue and Customs (HMRC).
SDLT applies on properties that cost more than £125,000. The amount you pay is based on the value of property or land, and - depending on the stamp duty thresholds - you will pay it when you:
- buy a freehold property
- buy a new or existing leasehold
- buy a property through a shared ownership scheme
- are transferred land or property in exchange for payment, for example you take on a mortgage or buy a share in a house
Wales has its own version, known as Land Transaction Tax (LTT). You can find out what the stamp duty rates are for buying a home or land in Wales in our guide to LTT, while the information provided below is for residential properties in England.
Current stamp duty rates for 2025
Current stamp duty rates for 2025
The amount of stamp duty you owe depends on the property's purchase price and factors like whether you're a first-time buyer, an overseas purchaser, or buying an additional property. Limited companies also face a higher stamp duty rate.
Stamp duty is a progressive tax, meaning that as the property price increases, the percentage rate also rises. However, you only pay the higher rate on the portion of the property price that falls within each specific rate band.
The last Stamp Duty update happened on the 1st of April 2025 and a few thesholds have been reduced.
For the purchase of a primary property, the regular stamp duty bands are as follow:
Purchase Price Bands (£) | Rate (%) |
Up to £125,000 | 0% |
Between £125,001 and £250,000 | 2% |
Between £250,001 and £952,000 | 5% |
Between £925,001 and £1.5 million | 10% |
Over £1.5 million | 12% |
The stamp duty thresholds are the point at which SDLT starts to apply to property and land purchases. If the value of the property or land is below the threshold that applies to you and your circumstances, there will be no stamp duty to pay.
However, the rates also take into account if you're eligible for stamp duty relief, and whether or not the property or land is your only property, or a second home.
For the purchase of a primary property as a first time buyer the following stamp duty bands apply:
Purchase Price Bands (£) | Rate (%) |
Up to £300,000 | 0% |
| Between £300,001 and £500,000 | 5% |
If the price is over £500,000, you cannot claim the first time buyer relief and the normal rates will apply.
Stamp duty rates for a second home
Stamp duty rates for a second home?
A higher rate of stamp duty applies when you buy a residential property (or a part of one) for £40,000 or more and if the following all apply to you:
- it will not be the only residential property worth £40,000 or more that you own (or part own) anywhere in the world
- you have not sold or given away your previous main home
- no one else has a lease on it which has more than 21 years left to run
Currently, for the purchase of an additional property, the stamp duty bands are:
Purchase Price Bands (£) | Rate (%) |
Up to £250,000 | 5% |
Between £250,001 and £925,000 | 10% |
Between £925,001 and £1.5 million | 15% |
Over £1.5 million | 17% |
Learn more about stamp duty for second homes.
How to calculate stamp duty?
How to calculate stamp duty?
The amount you have to pay is determined by the portion of the property price that falls within each stamp duty tax band or bracket. A few examples will illustrate this better.
Single property purchase example
If you were to buy a main residence for £295,000, the SDLT you owe will be:
- 0% on the first £125,000 = £0
- 2% on the second £125,000 = £2,500
- 5% on the final £45,000 = £2,250
- total SDLT = £4,750
Additional property purchase example
If you already own a property and plan on buying an additional property for £300,000, the SDLT you owe on the new purchase will be:
- 5% on the first £250,000 = £7,500
- 10% on the final £50,000 = £5,000
- total SDLT = £12,500
First-time buyer property purchase example
First-time homebuyers can benefit from a special tax discount. You qualify for this relief when you and any co-purchasers are buying your first property.
You'll pay:
- no SDLT up to £300,000
- 5% SDLT on the portion from £300,001 to £500,000
If the price is over £500,000, you cannot claim the relief.
If you are a first-time buyer and purchase a property for £500,000, the SDLT you owe for your purchase will be:
- 0% on the first £300,000 = £0
- 5% on the remaining £200,000 = £10,000
- total SDLT = £10,000
You can estimate your stamp duty costs before purchasing a property by using an online calculator. The HMRC's stamp duty calculator provides a quick way to see exactly how much you may need to pay.
Who pays stamp duty?
Who pays stamp duty?
It is always the buyer that pays stamp duty. A general rule to bear in mind is that anyone currently buying residential property in England that's worth more than £250,000 will have to pay stamp duty. As already mentioned, the rate of stamp duty will depend on factors such as property value and individual circumstances.
In some cases, stamp duty exemptions do apply - such as the first-time buyer stamp duty relief for first-time property buyers.
What is first-time buyer stamp duty relief?
What is first-time buyer stamp duty relief?
To help first-time buyers get onto the property ladder, the government introduced the first-time buyer stamp duty relief scheme to help them fund and afford to purchase a home.
You can claim the first-time buyer stamp duty relief if you, and anyone else you're buying a property with, are first-time buyers,
Being a first-time buyer means you have never purchased a property before in the UK or abroad, and are making your first purchase as a main residence.
The stamp duty rate brackets with the first-time buyer stamp duty relief are as follow:
Purchase Price Bands (£) | Rate (%) |
Up to £425,000 | 0% |
Between 425,001 and £625,000 | 10% |
However, if the property you're purchasing is valued above £625,000 you will not be able to claim this relief. In this instance, the standard rates of stamp duty will apply.
When and how to pay stamp duty?
Stamp duty is due once you have completed and you are the new owner of your home. Your solicitor will generally organise the payment, which is done online to HMRC. The deadline is 14 days after the purchase transaction has been finalised, and you could be charged penalties and interest if you are late in paying.
Even where you do not owe any stamp duty - either because you're a first-time buyer or the property's value is below the stamp duty threshold - you need to complete a declaration for HMRC. Your conveyancing solicitor will provide you with a stamp duty return and help you fill it out. While most solicitors will organise the payment of any outstanding stamp duty, it is your responsibility to ensure it is paid on time.
When can I claim a stamp duty refund?
If you have purchased a new primary residence but have not yet sold your previous home, you may be required to pay additional property rates. However, you can apply for a refund. To be eligible, you must sell your original main residence within three years.
You have 12 months from the sale of your original main residence or 12 months from the date you filed your SDLT tax return to claim the refund. You can claim until the later of the two deadlines. You can also check on the government website for stamp duty repayment.
Do i need to pay stamp duty on lease extension?
Stamp duty may be due on a lease extension depending on the premium price. However, this is uncommon, as the premium rarely surpasses the minimum threshold that triggers stamp duty.
Can I add stamp duty to my mortgage?
It is possible to add your stamp duty costs to your mortgage. However, it's important to understand that this will incur interest for the duration of the mortgage as well as affect your loan-to-value ratio.
When is stamp duty not payable?
If a property is transferred due to divorce or the dissolution of a civil partnership, no stamp duty is required. Similarly, properties inherited through a will or received as a gift are also exempt from stamp duty. However, if you swap properties with someone else, you are liable to pay stamp duty on the property you receive.
How can I reduce the stamp duty I pay?
You usually can't avoid paying stamp duty but there are a few ways to reduce it. Property buyers can make savings on stamp duty in the following situations:
First-time buyer - As a first-time buyer you can benefit from a cheaper stamp duty with the stamp duty relief.
Offer negotiation - You can negotiate the offered purchase price with the seller to reduce it to the previous stamp duty threshold.
Refund on second home surcharge - If you happen to pay the second home surcharge for a 2nd property but sell your first residence within 3 years, you can get a refund on the overpaid stamp duty.
Fixtures and fittings deduction -You can negotiate with the seller if you buy movable items ( furniture, carpets..) from them, and reduce your stamp duty bill.
New homes - Developers sometimes cover the stamp duty on new builds as an incentive for buyers.
Is there a way to avoid stamp duty?
You can't avoid paying stamp duty unless you meet certain criterias, so you should preferably talk to a solicitor.
Eligibility for exemption from stamp duty can be:
First-time buyer - If the property you plan on buying is below the SDLT threshold.
Inheritance - You are usually exempt from stamp duty when inheriting a property.
Gifted properties - Stamp duty doesn't apply on gifted property but some situations can be complicated when transferring a share of the property.
Divorce settlements - When transferring the property through a court order as part of the divorce.
Property purchase by employer - When the employer buys a house for the employee.
Expert help is just a call away
Hopefully now you have a fuller understanding of how stamp duty works, how much it might cost and how the changing thresholds may affect your plans.
Of course, if you have any more questions about stamp duty rates, when it must be paid or anything else, You can call us on and the Homeward Legal team will be happy to help. Alternatively you can also submit a conveyancing free quote online and we'll get back to you.