Stamp Duty Land Tax UK: Rates, Reliefs & How to Pay

Overview

Stamp Duty Land Tax is a one-off tax charged by HMRC when you buy land or property over a certain price in England and Northern Ireland. Scotland has its own version called Land and Buildings Transaction Tax, and Wales charges Land Transaction Tax, so the rules below only apply to properties south of the Scottish border and in Northern Ireland.

The tax is tiered, meaning different portions of the purchase price are taxed at different rates rather than the whole price being taxed at a single rate. Your total bill depends on a mix of factors: the purchase price, whether the property is residential or mixed-use, whether it replaces your main home, whether you already own other property, and whether you qualify as a first-time buyer.

SDLT applies to freehold purchases, most leasehold purchases (both new leases and assignments), and transfers of property in exchange for payment, which can include taking on a mortgage. The tax is payable whether you buy outright or through a shared ownership scheme, although shared ownership has its own specific rules.

Key steps

1. Work out the purchase price and property type. Before you can calculate SDLT, you need to know the agreed price and whether the property is residential, commercial, or mixed-use. Different rate bands apply to each category, and the rules for additional properties or company purchases are different again. 2. Check which reliefs apply. First-time buyer relief, multiple dwellings relief, and a handful of other reliefs can significantly reduce what you pay. Not every buyer qualifies, and some reliefs require you to meet specific conditions at completion. Check the current thresholds on gov.uk because they are reviewed periodically. 3. Factor in the higher rate for additional properties. If you already own a residential property anywhere in the world and you are not replacing your main home, a surcharge typically applies on top of the standard rates. This catches a lot of buyers off guard, particularly those helping family members or buying a holiday home. 4. Let your conveyancer handle the SDLT return. Your conveyancer or solicitor will usually prepare and submit the SDLT return to HMRC on your behalf and arrange for the tax to be paid. They will ask you for the funds before completion so the return can be filed within the statutory deadline. 5. Keep your confirmation and records. Once the return is submitted and tax paid, HMRC issues a certificate which is needed to register your ownership at HM Land Registry. Keep this and any correspondence safe, as you may need it if HMRC queries the return or if reliefs are reviewed later.

Common questions