Home-buying

What is Stamp Duty, and how does it affect me when purchasing a home?

It can be confusing when trying to calculate the Stamp Duty Land Tax (SDLT) applicable to your property purchase, so we’ve put together a collection of questions we get asked regularly to help break it down for you.

3 min read

By Sumaiya A

Buying your first home is an exciting milestone, but with it comes a whole new world of jargon like Stamp Duty Land Tax (SDLT).

In this article we’ll talk about:

what it is
whether you need to pay it
and how to calculate it

What is Stamp Duty

SDLT is a tax applied when you buy property or land in England. The amount you pay depends on the property price and whether you qualify for any exemptions or reliefs.

How much is Stamp Duty

The government sets thresholds, meaning you only pay SDLT if your property costs above a certain amount. From 1 April 2025:

First time-buyers will pay:

Up to £300,000 – 0% (where it’s a residential property worth £500,000 or less).
The next £301,000 to £500,000 – 5%

For residential properties, from 1 April 2025:

Up to £125,000 – 0%
The next £125,001 to £250,000 – 2%
The next £250,001 to £925,000 – 5%
The next £925,001 to £1.5 million – 10%
The remaining amount (i.e. above £1.5 million) – 12%

Buying an Additional Property or buying through a company

If you’re purchasing another property (such as a second home or buy to let), an extra 5% is added to the standard SDLT rates. However, if you sell your main home within 36 months, you might be able to claim a refund.

If you are buying your property through a company, even if its the only property the company will own, an extra 5% is added to the standard SDLT rates

Stamp Duty for Non UK Residents

If you haven’t been in the UK for at least 183 days in the past year, you’re classed as a non UK resident for SDLT purposes. This means you pay an extra 2% on top of the usual rates. Check if you’re eligible for a refund of the surcharge.

What About Leasehold Properties

If you’re buying a leasehold home, SDLT applies to the lease price as well as the total rent over the lease term (if above a certain threshold). From April 2025, SDLT applies to leases with a total rent over £125,000.

How to Calculate Your SDLT

Not sure how much you’ll need to budget? Use the government’s SDLT calculator to get an accurate figure.

Final Thoughts

SDLT might seem complicated, but understanding the basics can help you plan your finances. Since rules vary by region, we recommend visiting the relevant official sites for more details. If you want to see some examples of Stamp Duty calculations for England, check out the official Stamp Duty Land Tax website for accurate and up-to-date information. If you’re purchasing a home in Scotland check out: Land and Buildings Transaction Tax (LBTT) and for Wales: Land Transaction Tax rates and bands | GOV.WALES

Ready to take the next step? Let’s talk!

This article is for information purpose only and shall not be treated as professional advice. When purchasing a property, you should consult a suitably qualified and experienced professional, such as a solicitor or accountant, to seek tax advice.