SDLT Definition
Stamp Duty Land Tax (SDLT) is a tax paid to HMRC when you purchase property or land over a certain price threshold in England and Northern Ireland. It is calculated on a progressive, tiered basis - meaning you pay different rates on different portions of the purchase price, not a single flat rate on the entire amount.
SDLT replaced the older Stamp Duty system in December 2003 and is one of the largest upfront costs for property buyers alongside the deposit and legal fees.
Current SDLT Rates (2025-26)
Standard residential rates for purchases completing from 1 April 2025:
| Property Price Band | SDLT Rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001 – £250,000 | 2% |
| £250,001 – £925,000 | 5% |
| £925,001 – £1,500,000 | 10% |
| Over £1,500,000 | 12% |
First-Time Buyer Relief
First-time buyers benefit from reduced SDLT rates on properties costing up to £500,000:
- 0% on the first £300,000
- 5% on the portion from £300,001 to £500,000
- If the property costs more than £500,000, first-time buyer relief does not apply and standard rates are charged on the full amount
To qualify, you must be purchasing your first residential property and intend to live in it as your main residence.
Additional Dwelling Surcharge
If you already own a residential property (anywhere in the world) and you are buying an additional one, you must pay an extra 3% surcharge on top of the standard SDLT rates on the entire purchase price. This applies from the first pound, so there is no nil-rate band.
Common scenarios where the surcharge applies:
- Buying a buy-to-let investment property
- Purchasing a second home or holiday home
- Buying a new home before selling your existing one (you may be able to reclaim within 36 months)
- Companies and trusts buying residential property
Non-UK Resident Surcharge
Non-UK residents pay an additional 2% surcharge on top of the standard SDLT rates (and any additional dwelling surcharge). This means a non-UK resident buying a second property could pay standard rates plus 3% plus 2% - a total surcharge of 5 percentage points.
You are classed as a non-UK resident for SDLT purposes if you have not been present in the UK for at least 183 days in the 12 months before the purchase.
How to Pay SDLT
Your solicitor or conveyancer normally handles the SDLT return and payment on your behalf:
- A return must be filed with HMRC within 14 days of completion
- Payment must be made at the same time as filing
- A return is required even if no SDLT is due (e.g. the property is below the threshold)
- Late filing incurs a £100 automatic penalty, rising to £200 if more than 3 months late, plus interest on any tax owed