In brief
- Treat all-in completion cash as the core decision metric, not tax in isolation.
- Buyer type and nation can shift costs materially at the same property price.
- Run at least three scenarios before setting your offer ceiling.
- Confirm final treatment with official sources and your conveyancer.
Definition in plain English
Stamp Duty Land Tax (SDLT) is the property transaction tax paid by buyers in England and Northern Ireland. It is calculated as a percentage of the purchase price using a banded system — similar to income tax — where each band applies only to the slice of the price that falls within it, not the whole amount. As of April 2025, the standard nil-rate threshold is £125,000, meaning most purchases above that level attract at least some SDLT.
Context
Understanding how SDLT bands work is essential before making an offer, because the tax bill changes non-linearly near band boundaries and buyer-type assumptions (first-time buyer, moving home, second home) can produce very different results at the same purchase price.
Use the calculator for this topic
Run multiple price points and buyer types before setting your final offer ceiling. Keep all assumptions visible in one place so comparisons stay honest.
Worked examples (home mover, typical fees)
How SDLT bands work in England and Northern Ireland
SDLT uses a banded, or 'slice', system. The current standard residential rates from April 2025 are: 0% on the first £125,000; 2% on £125,001 to £250,000; 5% on £250,001 to £925,000; 10% on £925,001 to £1,500,000; and 12% above £1,500,000. So on a £300,000 purchase, you pay 0% on the first £125,000 (£0), 2% on the next £125,000 (£2,500), and 5% on the remaining £50,000 (£2,500) — a total of £5,000. The full purchase price is never taxed at the highest applicable rate.
First-time buyers receive a relief that raises the 0% threshold to £300,000 and applies a 5% rate from £300,001 to £500,000. Above £500,000, first-time buyer relief is withdrawn entirely and standard rates apply from £0. This means a first-time buyer at £500,000 pays the same as any other buyer, but at £299,000 they pay nothing.
Additional property purchasers — anyone buying a second home, buy-to-let or investment property while already owning another — pay a 5% surcharge on every SDLT band. So the effective rates become 5%, 7%, 10%, 15% and 17% respectively. This surcharge was increased from 3% to 5% in October 2024 and applies from the first £1 of the purchase price.
Scotland and Wales use different transaction taxes
Scotland replaced SDLT with Land and Buildings Transaction Tax (LBTT) in April 2015. LBTT has its own band structure and rates, administered by Revenue Scotland. The nil-rate threshold for LBTT is £145,000, and the Additional Dwelling Supplement (ADS) applies to additional property purchases at 6% on the full purchase price. Scotland does not use SDLT at all — any property north of the border is subject to LBTT, not SDLT.
Wales replaced SDLT with Land Transaction Tax (LTT) in April 2018, administered by the Welsh Revenue Authority. LTT has different thresholds and rates from both SDLT and LBTT. The nil-rate band for LTT is £225,000 for residential purchases. An additional rates surcharge also applies in Wales for second homes and buy-to-let purchases.
When using this calculator, selecting the correct jurisdiction is therefore essential. The same purchase price in London, Edinburgh and Cardiff will produce three different tax figures under three different legal systems.
When SDLT is due and how it is paid
SDLT must be filed and paid within 14 days of completion. Your solicitor or conveyancer will almost always handle this on your behalf, submitting the SDLT1 return to HMRC and transferring your funds on completion day. Failure to file and pay within 14 days results in automatic penalties: an initial £100 penalty for returns up to 3 months late, rising to £200 plus potential interest for longer delays.
SDLT is not paid at exchange, only at completion. This is a common source of confusion — the funds must be available at completion, not at the point of signing contracts. However, you should plan for the liability much earlier so it does not create a last-minute cash gap.
Decision framework used by careful buyers
Start with an offer ceiling based on total cash, not headline house price. In practice, buyers who only track deposit and mortgage payments can miss the transaction-cost layer, which is exactly where completions become stressful.
Use a three-pass approach: first estimate tax by nation and buyer type, then add realistic fees, then pressure-test the result by increasing the offer by £10,000 and £25,000. This shows how sensitive your budget is before bidding.
Treat the model as a planning instrument. Final legal liability always sits with official calculators and your conveyancer’s completion statement, but early visibility reduces avoidable surprises.
Practical checklist before making an offer
Confirm your likely buyer status first (home mover, first-time buyer, or additional property). Switching status can alter tax materially at the same price point, so this should be fixed before negotiating.
Collect at least two conveyancing quotes and check what is included. Buyers often compare legal fees without checking disbursements, search packages, leasehold supplements or transfer fees.
Keep a contingency buffer instead of budgeting to the exact minimum. A modest reserve can protect timelines when valuation, legal or lender admin costs move late in the process.
What stamp duty is in plain terms
Stamp duty (SDLT) is a transaction tax on residential purchases in England and Northern Ireland. Scotland and Wales use different taxes (LBTT and LTT), with their own thresholds and rate structures.
The tax is calculated in slices, not as one single rate on the full price. This is why buyers should inspect a band-by-band table rather than relying on quick headline percentages.
When comparing two properties close in price, the marginal band can still change your total by a meaningful amount, especially when combined with fees.
Frequently asked questions
What is the stamp duty threshold in 2025/26?
From April 2025, the standard SDLT nil-rate threshold reverted to £125,000 for purchases in England and Northern Ireland. First-time buyers have a higher threshold of £300,000 (0% up to £300,000, then 5% to £500,000). Scotland uses LBTT with a £145,000 nil-rate band, and Wales uses LTT with a £225,000 nil-rate band.
How is stamp duty calculated on a £350,000 purchase?
For a standard buyer (not first-time, not additional property): 0% on the first £125,000 = £0; 2% on £125,001–£250,000 = £2,500; 5% on £250,001–£350,000 = £5,000. Total SDLT: £7,500. A first-time buyer at £350,000 pays: 0% on £0–£300,000 = £0; 5% on £300,001–£350,000 = £2,500. Total: £2,500 — a £5,000 saving.
Do you pay stamp duty on the whole price or just above the threshold?
Only on the relevant slice. SDLT uses a banded system identical in structure to income tax — each rate applies only to the portion of the price within that band. You never pay the higher rate on the whole purchase price.
Does Scotland have stamp duty?
No. Scotland uses Land and Buildings Transaction Tax (LBTT), which replaced SDLT in 2015. LBTT has different thresholds and rates. For Scottish purchases, select Scotland in the calculator — using SDLT rates for a Scottish property will give the wrong result.
Do I pay stamp duty on a buy-to-let property?
Yes, plus the additional dwelling surcharge of 5% on every SDLT band. A £250,000 buy-to-let purchase incurs standard SDLT of £2,500 plus a surcharge of £12,500 (5% of the full £250,000), for a total of £15,000. Always model buy-to-let and second home purchases using the additional property setting.
When do you pay stamp duty after buying a house?
Within 14 days of completion. Your solicitor handles the filing and payment, using the funds you transfer on completion day. SDLT is not paid at exchange — only at the point legal ownership passes, which is completion.
Is stamp duty included in the mortgage?
Usually not. Most lenders will not include SDLT in the mortgage advance because it is not a property cost they can secure against. You need the SDLT available as part of your cash at completion. Some lenders allow it in specific schemes, but this is not standard — confirm with your mortgage adviser.
References
- GOV.UK: Stamp Duty Land Tax — Primary SDLT rates and process guidance.
- Revenue Scotland: LBTT — Official LBTT rates and ADS information.
- Welsh Revenue Authority: LTT — Official LTT rates and higher-rate guidance.
For methodology and editorial policy, see Methodology and Editorial standards.