What is stamp duty and how much do I pay?
Stamp duty is a tax you pay if you purchase property above a certain value in England and Northern Ireland, with rules slightly different in Scotland and Wales. Here we take a look at how stamp duty works and how much you'll have to pay when buying a property.
Key takeaways
Stamp duty is a mandatory tax that's payable when you buy a residential or non-residential property
Thresholds apply that determine how much you pay. These are different depending on the value of the property and whether you're a first-time buyer, or you're buying a new home or additional property
First-time buyers in England and Northern Ireland don't have to pay any stamp duty if the property they're buying is priced up to £300,000. It’s up to £175,000 in Scotland. There is no separate first-time buyer relief in Wales, but a zero-rate up to £225,000 for all buyers
In England and Northern Ireland, buyers of a main home don’t pay Stamp Duty on properties priced up to £125,000. In Wales, no equivalent tax is charged on the first £225,000 of a purchase, and in Scotland the nil-rate band starts at £145,000.
What is stamp duty?
Stamp Duty Land Tax (SDLT) – usually just referred to as stamp duty – in England and Northern Ireland, is a tax you must pay if you purchase a property or land that costs more than a set amount.
In Scotland, the equivalent is Land and Buildings Transactions Tax. In Wales, buyers pay Land Transaction Tax.
How much stamp duty do I have to pay?
The amount you’ll pay in stamp duty varies as there are several different rate bands – and where you fall will depend on what type of buyer you are (for example, first-time buyers have a different threshold from second home buyers) and how much the property costs.
It also depends on where you're buying property in the UK, as the tax is different in Wales and Scotland. Your overall tax bill is calculated based on the sliding scale – or tiered rates.
Our stamp duty calculator can work out how much tax you’ll pay depending on your status, property price and where you live.
Stamp duty rates from April 1, 2025 (England & Northern Ireland)
Stamp duty rates for first-time buyers
Property price | SDLT rate |
|---|---|
Up to £300,000 | 0% |
£300,001 to £500,000 | 5% |
Over £500,000 | Standard rates apply (no relief) |
Stamp duty rates for non-first-time buyers (main residence)
Property price | SDLT rate |
|---|---|
Up to £125,000 | 0% |
£125,001 to £250,000 | 2% |
£250,001 to £925,000 | 5% |
£925,001 to £1.5 million | 10% |
Over £1.5 million | 12% |
Stamp duty rates for additional properties (e.g. second homes, buy-to-let)
Property price | SDLT rate |
|---|---|
Up to £125,000 | 5% |
£125,001 to £250,000 | 7% |
£250,001 to £925,000 | 10% |
£925,001 to £1.5 million | 15% |
Over £1.5 million | 17% |
Source: Gov.uk
Land and Building Transaction Tax in Scotland
The Land and Building Transaction Tax (LBTT) is paid instead of stamp duty in Scotland.
As with the rest of the UK, it is a different charge depending on whether you are a first-time buyer, home mover or buying a second property. It is also calculated by percentage, but the boundaries are slightly different.
Property price | First-time buyers | Home movers | Second property buyers |
|---|---|---|---|
Up to £145,000 | 0% | 0% | 8% |
£145,001 – £175,000 | 0% | 2% | 10% |
£175,001 – £250,000 | 2% | 2% | 10% |
£250,001 – £325,000 | 5% | 5% | 13% |
£325,001 – £750,000 | 10% | 10% | 18% |
Over £750,000 | 12% | 12% | 20% |
Source: Gov.scot
Land Transaction Tax in Wales
Land Transaction Tax (LTT) rates are used in Wales instead of stamp duty and are also structured based on the type of property transaction.
There are main residential rates for standard home purchases and higher residential rates for additional properties, such as second homes, but Wales does not offer specific first-time buyer relief.
Property price | Main residential rates | Higher residential rates |
|---|---|---|
Up to £225,000 | 0% | 4% |
£225,001 – £400,000 | 6% | 10% |
£400,001 – £750,000 | 7.5% | 11.5% |
£750,001 – £1,500,000 | 10% | 14% |
Over £1,500,000 | 12% | 16% |
Source: Gov.Wales
How has stamp duty changed in 2025?
Here is how stamp duty has changed in 2025 for buyers with example scenarios:
First-time buyers
As of April 1, 2025, first-time buyers in England and Northern Ireland have seen the threshold where they start paying stamp duty reduced from £425,000 to £300,000.
A first-time buyer would then pay 5% on any additional amount up to £500,000. If the property costs more than £500,000, no first-time buyer relief can be claimed.
Examples:
Purchase price: £280,000. As the price is under £300,000, no stamp duty is payable.
Purchase price: £325,000. The first £300,000 is tax-free and 5% is charged on the remaining £25,000. Total stamp duty paid is £1,250.
Purchase price: £550,000. First-time buyer relief does not apply over £500,000 so standard rates are used. The first £125,000 is taxed at 0%, the next portion (up to £250,000 is taxed at 2%, and the remaining £300,000 (up to £550,000) is taxed at 5%. This brings the total stamp duty charge to £17,500.
New home buyers
If you are buying a new main residence - you are moving house, for example - the threshold where you start paying stamp duty has fallen from £250,000 to £125,000.
Examples:
Purchase price: £200,000. Stamp duty is owed at 2% on the £75,000 above the £125,000 threshold, giving a total of £1,500. Before April 1, 2025, no stamp duty would be due.
Purchase price: £500,000. No stamp duty is owed on the first portion up to £125,000, but stamp duty must be paid at 2% (£125,001 to £250,000) and 5% (£250,001 to £925,000), equalling £15,000 in total.
Who has to pay stamp duty?
The buyer is responsible for paying stamp duty, and it is usually handled by their solicitor during the purchase process. You'll pay stamp duty on residential and non-residential properties, but the threshold differs for each.
You’ll also pay stamp duty whether you’re buying:
Your first home
A new home
An additional property
Is stamp duty the same for freehold and leasehold properties?
SDLT is broadly the same for freehold and leasehold residential properties, with the main SDLT calculation based solely on the purchase price, regardless of whether the property is freehold or leasehold.
The key difference arises with leasehold homes, where SDLT may also be charged on the net present value (NPV) of the ground rent. If the lease has high or escalating ground rent, the NPV can exceed HMRC thresholds and trigger an additional SDLT charge.
Freehold properties never incur this extra element because they do not involve rent. In most typical residential leases, ground rents are low enough that leasehold buyers pay the same SDLT as freehold buyers.
However, leases with unusually high rents or long terms can lead to higher SDLT liabilities, giving an extra potential cost.
When do I pay stamp duty?
You need to pay any stamp duty within 14 days of completion of the purchase. That is when:
the transaction legally completes (or the effective date occurs)
the buyer becomes entitled to the property (or substantially takes possession)
In practice, if you’re using a conveyancing solicitor they will usually submit the return and pay the tax on your behalf on the day of completion.
Why do I have to pay stamp duty?
Stamp duty is a mandatory tax imposed by the government when you purchase property or land. It is a significant source of public revenue and forms part of the wider taxation system used to fund government services.
How do I pay stamp duty?
You’ll pay stamp duty by filing a SDLT return to the HMRC. If you have a solicitor, conveyancer or agent they’ll usually do this for you for a fee.
They should also help you claim any relief you’re eligible for, such as a first-time-buyer discount.
Can I get a refund on stamp duty?
If you intend to purchase a new home and sell your old property, and there’s a delay in the selling process, you’ll be liable to pay the higher rate of stamp duty for additional properties.
To get a refund, you must submit your claim within 12 months of whichever date is later:
The date you sold your previous main residence
The filing date of the SDLT return for your new property
To apply for a refund, use the online form provided by HM Revenue & Customs (HMRC) where you’ll be asked to provide details about both properties and the amount of tax you're requesting to be repaid.
Does stamp duty for commercial property differ from residential property?
Yes, SDLT rates for commercial (non-residential) properties differ from residential properties.
Commercial or non-residential properties include almost any property not primarily used as a home. They include offices, shops, warehouses, factories, agricultural land, and mixed-use properties where the main purpose is not residential.
Commercial property price | SDLT rate |
|---|---|
Up to £150000 | 0% |
£150,001 to £250,000 | 2% |
Above £250,000 | 5% |
There may also be a SDLT charge for the leasehold rent on a non-residential property. This relates to the rent you agree to pay over time for a commercial or non-residential property, like an office or shop.
SDLT may charge an additional amount because HMRC calculates the net present value (NPV) of all future rent, treating it as part of the total property value for tax purposes.
Leasehold rent | SDLT rate |
|---|---|
Up to £150000 | 0% |
£150,001 to £250,000 | 1% |
Above £250,000 | 2% |
As with residential property, SDLT doesn’t apply in Wales or Scotland. Instead, property transactions are taxed under LTT in Wales and LBTT in Scotland.
These cover freehold and leasehold purchases, with their own rates, thresholds, and rules. Commercial leases, for example, can be treated differently, including how future rent is calculated.
So if you’re buying non-residential property there, the tax works differently than in England or Northern Ireland.
Personal Finance Expert
Our expert says
Stamp duty isn’t a tax you can avoid, but it is one to be aware of, so always factor it into your plans when buying property. Take particular note of the threshold boundaries as well. For example, if you’re a first-time buyer purchasing a property for £499,000 in England, you’ll pay £9,950 in stamp duty. But if the sale price goes up to £501,000, the stamp duty leaps to £15,050. The solution? Know your numbers before you start.
Stamp duty exemptions
There are a number of cases where a property changes ownership and you might not have to pay stamp duty. Here is a selection:
First-time buyers’ relief
No SDLT is due on the first £300,000 of a property priced up to £500,000. Standard rates apply to amounts above £300,000. Thresholds differ in Scotland and Wales.
Buying a houseboat or mobile home
Houseboats, caravans, and mobile homes are not considered land or property, so SDLT should not apply.
Purchases under £40,000
If the total purchase price of a property is less than £40,000, no SDLT is due.
Shared ownership exemption
If you’re buying a shared ownership home and opt to pay SDLT on the full market value upfront, you may avoid further SDLT payments if you increase your ownership share later.
Transfers between spouses or civil partners
Transfers between spouses or civil partners are exempt from SDLT when there is no chargeable consideration, for example, if property is transferred as part of a divorce or civil-partnership dissolution, or as a gift with no mortgage or other liability taken over. If the recipient assumes debt (e.g. a mortgage) or other value, SDLT may be payable.
Inheritance
No SDLT is due when property is inherited through a will.
Gifts
If a property is gifted without any payment or mortgage transfer, no SDLT is payable.
Charity relief
Charities may be exempt from SDLT when purchasing property for charitable purposes.
Registered social landlords
Certain acquisitions by registered social landlords may be exempt from SDLT.
Multiple dwellings relief
Purchasing multiple dwellings in a single transaction can qualify for relief, potentially reducing the SDLT payable.
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Tim Heming
Personal Finance Expert
Tim Heming is a journalist and editor who has written about personal finance for national newspapers and consumer websites for 15 years. Tim enjoys providing no-nonsense information to help consumers...
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Alan helps MoneySuperMarket break down complicated financial topics into plain English, to help you find the right deals. When he’s not writing or editing you might find him cycling the South Downs.
