How stamp duty works

Stamp Duty Land Tax (SDLT) is the tax you pay when you buy a property over a certain price in England or Northern Ireland. It is charged in slices: nothing on the first £125,000, then a rising percentage on each band above that. What you actually pay depends on the price, whether you are a first-time buyer, and whether you already own another property.

The standard rates

These are the standard residential rates that apply when you are buying a home to live in and will not own a second property afterwards. They have been in force since 1 April 2025 and apply for the 2026/27 tax year. The threshold where stamp duty starts is £125,000, so there is nothing to pay on a standard purchase below that.

How the slices work

Stamp duty works the same way as income tax bands. You do not pay one rate on the whole price. Instead the price is split into slices, and each rate applies only to the slice that falls in its band. So if a home costs £300,000, the first £125,000 is taxed at 0%, the next £125,000 at 2%, and only the last £50,000 at 5%.

This is why crossing a threshold does not cause a sudden jump on the whole bill: only the pound that crosses into a new band is taxed at the higher rate. To see the slices for your own price, you can work out your stamp duty and the calculator shows the breakdown band by band.

First-time buyer relief

A first-time buyer is someone who has never owned a property anywhere in the world. If everyone buying is a first-time buyer, you get a relief that lifts the tax-free amount:

• No stamp duty on the first £300,000.
• 5% on the part of the price from £300,001 to £500,000.

There is a catch. The relief only applies if the price is £500,000 or less. Buy for even £1 more than £500,000 and you lose it entirely, paying the standard rates on the whole price instead. Just below that line, the relief can save a first-time buyer up to £6,250 compared with the standard bands.

Second homes and buy-to-let

If you will own more than one property after the purchase, you usually pay a surcharge of 5% on top of every standard band. That means the first £125,000 is taxed at 5% rather than 0%, the next band at 7%, and so on up the scale. It applies to second homes, holiday homes and buy-to-let, and it kicks in once the price is £40,000 or more.

There is an exception for people moving home. If you are replacing your main residence and sell the old one, the surcharge does not apply. If the sale of the old home completes after the new purchase, you pay the surcharge up front and can claim it back, as long as you sell within 36 months. The surcharge is the cost of buying an extra property; when you later sell it at a profit you may owe capital gains tax on the gain.

When you pay it

Stamp duty is due shortly after completion, the day the sale finishes and you collect the keys. You have to file an SDLT return and pay HMRC within 14 days of that date. In practice your solicitor or conveyancer usually files the return and pays it for you, then includes it on your completion bill, so you rarely deal with HMRC yourself.

It is a cash cost, separate from your deposit and your mortgage. You cannot simply add it to the loan, so most buyers pay it from savings. It sits alongside your deposit when you budget, and a bigger deposit lowers your loan-to-value, which is how much you borrow as a share of the price.

Scotland and Wales

Stamp Duty Land Tax only covers England and Northern Ireland. The other UK nations run their own property taxes with different names, thresholds and rates:

• Scotland charges Land and Buildings Transaction Tax (LBTT), set by the Scottish Government.
• Wales charges Land Transaction Tax (LTT), set by the Welsh Government.

The bands and reliefs in this article, and our calculator, are for SDLT in England and Northern Ireland only. If you are buying in Scotland or Wales, the figures will be different.

Worked examples

Two examples show how the slices add up. Both use the 2026/27 standard rates above.

A £295,000 home, standard purchase. The first £125,000 is taxed at 0%, so nothing. The next £125,000 (the slice from £125,001 to £250,000) is taxed at 2%, which is £2,500. The final £45,000 (from £250,001 to £295,000) is taxed at 5%, which is £2,250. Total stamp duty: £4,750.

A £400,000 home, first-time buyer. The first £300,000 is taxed at 0%, so nothing. The remaining £100,000 (from £300,001 to £400,000) is taxed at 5%, which is £5,000. Total stamp duty: £5,000. Without the relief, the same purchase would cost £7,500, so the relief saves £2,500 here.

These are the same sums our calculator runs. Once you have the bill, you can plan the rest of the move, from the deposit to your monthly mortgage repayments and whether you might later look at overpaying your mortgage.

Common questions

How much is stamp duty in England in 2026?

It depends on the price and your situation. On a standard purchase you pay nothing up to £125,000, then 2% on the slice from £125,001 to £250,000, 5% from £250,001 to £925,000, 10% from £925,001 to £1,500,000, and 12% on anything above £1,500,000. First-time buyers and people buying an additional property pay different amounts. Our stamp duty calculator works out the exact figure.

Do first-time buyers pay stamp duty?

Not on the first £300,000, as long as the price is £500,000 or less. On a home priced between £300,001 and £500,000 you pay 5% on the part above £300,000. If the price is over £500,000 the relief does not apply at all and you pay the standard rates instead.

How much is stamp duty on a second home?

You pay the standard rates plus a 5% surcharge on every band, so the first £125,000 is taxed at 5% rather than 0%, and so on up the scale. The surcharge applies when the property costs £40,000 or more and you will own more than one property after the purchase. It covers second homes and buy-to-let.

Is stamp duty paid on the whole price or just part of it?

Just part of it. Stamp duty is worked out in slices, like income tax bands. Each rate applies only to the portion of the price that falls in that band, not to the whole amount. So a higher price does not suddenly tax everything at a higher rate.

When do you pay stamp duty?

You file an SDLT return and pay HMRC within 14 days of completion (the day the sale finishes and you get the keys). In practice your solicitor or conveyancer usually files it and pays on your behalf, then bills you, so you do not deal with HMRC directly.

Can stamp duty be added to my mortgage?

Not directly. Stamp duty is a separate cash cost due shortly after completion, so most buyers pay it from savings. You can sometimes borrow a little more on the mortgage to free up cash for it, but that raises your loan, your loan-to-value and your monthly payment, so it is worth weighing up.

Are these stamp duty figures exact?

They are estimates to help you plan, not financial or tax advice. The rules have details we cannot cover here, such as linked transactions, leasehold and shared ownership. Confirm your own bill with HMRC or your solicitor before you commit.

About this article

Written by the calcd team. We build UK money calculators and explain the numbers behind them in plain English. We checked the rates and rules in this article against gov.uk and HMRC, the primary source for Stamp Duty Land Tax, and corroborated the plain-English detail against MoneyHelper. The bands shown are the standard residential rates in force from 1 April 2025, applying for the 2026/27 tax year. The figures here are estimates to help you plan, not financial or tax advice. Confirm your own bill with HMRC or your solicitor before you commit. Last updated June 2026.