Stamp Duty Land Tax (SDLT) applies to most property and land transactions.
It can affect:
- Freehold purchases
- Leasehold purchases
- Shared-ownership homes
- Commercial properties
SDLT can also apply when you take on a mortgage debt during a property transfer. Therefore, a transfer can create an SDLT bill even when little cash changes hands.
You need to send an SDLT return within 14 days of the effective transaction date. You must also pay any SDLT due within the same 14-day period.
Stamp Duty Land Tax Rates
HMRC uses different tax bands for most property purchases. You apply each rate only to the part of the purchase price within that band.
For standard residential purchases, HMRC currently uses the following rates:
| Part of the Property Price | SDLT Rate (2026) |
|---|---|
| Up to £125,000 | 0% |
| £125,001 to £250,000 | 2% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1,500,000 | 10% |
| Over £1,500,000 | 12% |
For instance, a standard residential purchase at £350,000 creates a SDLT bill of £7,500. You pay £2,500 on the second band and then £5,000 on the remaining £100,000.
Stamp Duty Land Tax for First-Time Buyers
First-time buyers can claim relief when they meet all the qualifying conditions:
- Each buyer must count as a first-time buyer
- Each buyer must intend to use the property as their main home
- The property must cost £500,000 or less
The current First-Time Buyers’ Relief rates are as follows:
| Part of the Property Price | SDLT Rate (2026) |
|---|---|
| Up to £300,000 | 0% |
| £300,001 to £500,000 | 5% |
Therefore, a first-time buyer purchasing a £350,000 home would pay £2,500 in SDLT. However, you cannot claim this relief when the purchase price exceeds £500,000. Previous residential property ownership anywhere in the world can also prevent a claim.
As previously stated, if several people buy together, each buyer must meet the first-time buyer conditions.
Purchasing an Additional Property
Higher rates may apply when your purchase leaves you owning more than one qualifying residential property. These rules commonly affect buy-to-let properties, second homes and holiday homes.
The higher rates add five percentage points to the standard residential rates:
| Part of the Property Price | SDLT Rate (2026) |
|---|---|
| Up to £125,000 | 5% |
| £125,001 to £250,000 | 7% |
| £250,001 to £925,000 | 10% |
| £925,001 to £1,500,000 | 15% |
| Over £1,500,000 | 17% |
However, special rules can apply when you replace your main home.
For instance, you may buy your new home before selling your previous main home. In this situation, you could initially pay the higher rates. You may later reclaim the extra SDLT after selling your previous main home within three years.
Stamp Duty Land Tax for Non-UK Residents
Some non-UK resident buyers pay an additional 2% surcharge on residential property.
For individual buyers, HMRC initially checks the 12 months before the purchase date. You normally face the surcharge if you spent fewer than 183 days in the UK.
However, special rules apply to:
- Spouses
- Joint buyers
- Companies
- Partnerships
- Trusts
The surcharge also sits in top of other residential SDLT rates. Therefore, it can apply alongside the higher rates for additional properties.
Non-Residential and Mixed-Use Property
Different Stamp Duty Land Tax rates apply to non-residential and mixed-use property. A mixed-use property contains both residential and non-residential elements.
For example: A shop with a flat above it may count as mixed-use property.
HMRC currently uses the following rates for freehold purchases and lease premiums:
| Part of the Purchase Price | SDLT Rate (2026) |
|---|---|
| Up to £150,000 | 0% |
| £150,001 to £250,000 | 2% |
| Over £250,000 | 5% |
These rates differ significantly from residential rates. However, property classification can become complicated, so buyers should check the position before completing.
Leasehold Properties
Stamp Duty Land Tax can apply to both a lease premium and rent under a new lease. HMRC calculates the tax on rent using its net present value. This calculation measures the value of future rent today.
For residential leases, the current rent threshold stands at £125,000. You pay 1% on the net present value above the threshold.
Different rates apply to non-residential lease rent:
- HMRC charges 0% up to £150,000 and then 1% up to £5,000,000
- HMRC charges 2% on the portion over £5,000,000
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This article is for general informational purposes only and does not constitute legal or financial advice. While we aim to keep our content up to date and accurate, UK tax laws and regulations are subject to change. Please speak to an accountant or tax professional for advice tailored to your individual circumstances. Pi Accountancy accepts no responsibility for any issues arising from reliance on the information provided.