Stamp Duty Rates 2025: What Buyers Pay After the March 2025 Threshold Changes

The stamp duty temporary relief that had been in place since September 2022 came to an end on 31 March 2025. From 1 April 2025, the nil rate band reverted from £250,000 back to £125,000, and the first-time buyer relief thresholds also reset. For many buyers who completed purchases before the deadline, the savings were real. For everyone purchasing after that point, the bill is higher than it was during the relief period.

Stamp duty land tax (SDLT) applies to residential property purchases in England and Northern Ireland. Scotland and Wales have their own systems. Understanding how the rates are structured, what relief you might be entitled to, and how to calculate the total bill is essential before exchanging contracts. Use our stamp duty calculator to get an exact figure based on your purchase price and circumstances.

How stamp duty is calculated: the banded system

SDLT is not charged at a flat rate on the entire purchase price. It works like income tax: different rates apply to different portions of the price, and you only pay each rate on the slice within that band. Buying a property for £350,000 does not mean paying stamp duty on the whole £350,000 at the same rate. You pay nothing on the first £125,000, 2% on the next £125,000, and 5% on the remaining £100,000.

The calculation runs through each band in sequence. Whatever portion of the purchase price falls within each band is multiplied by that band's rate, and the totals are added together. For most residential purchases in England the bill is lower than people assume because so much of the price sits in the nil rate and 2% bands rather than the higher ones.

First-time buyer relief after the March 2025 reset

First-time buyers receive relief that reduces their SDLT bill compared to someone buying their second or subsequent property. Under the rules from 1 April 2025, first-time buyers pay no stamp duty on the first £300,000 of a property's purchase price. On the portion between £300,001 and £500,000 they pay 5%. Properties priced above £500,000 receive no first-time buyer relief at all and the standard rates apply from the first pound.

The £500,000 cut-off is a hard cliff edge. A first-time buyer purchasing at £499,999 pays £9,999 in stamp duty (5% on the £199,999 above the £300,000 nil threshold). The same buyer purchasing at £500,001 pays the standard rates on the whole sum: 0% on the first £125,000, 2% on the next £125,000, and 5% on the remaining £250,001. That comes to roughly £12,500 in SDLT. Cross the £500,000 line and the relief vanishes entirely, adding over £2,500 to the tax bill in one step.

To qualify as a first-time buyer, you must never have owned a residential property anywhere in the world, not just in the UK. Joint purchases require both buyers to be first-time buyers. If one person in a couple has previously owned a property, neither party can claim first-time buyer relief on that purchase.

Second home and buy-to-let surcharge

Anyone purchasing an additional residential property pays a surcharge on top of the standard SDLT rates. From October 2024, that surcharge increased from 3% to 5%. It applies to every pound of the purchase price, not just the portion above a threshold. Buy-to-let investors, holiday home buyers, and anyone whose name is on a mortgage for another property at the point of completion face this additional charge.

The impact is substantial. A buy-to-let investor purchasing at £300,000 pays standard SDLT of £5,000 plus a 5% surcharge on the full £300,000, adding £15,000. Total SDLT is £20,000. At £500,000 the standard bill is £12,500 and the surcharge adds £25,000, making the combined bill £37,500. These are meaningful costs that need to be factored into any rental yield calculation before committing to a purchase. Our rental yield calculator lets you model gross and net yields with acquisition costs included.

The surcharge can be reclaimed in some circumstances. If you sell your previous main residence within three years of completing the new purchase, HMRC will refund the additional portion of SDLT if the new property became your main home. The refund claim must be made within twelve months of selling the old property or three years of the original purchase, whichever is later. The rules around what counts as a main residence are detailed and HMRC takes them seriously.

Non-resident surcharge and overseas buyers

Since April 2021 there has been an additional 2% surcharge for buyers who are not UK residents at the time of purchase. This applies on top of the standard rates and the additional dwelling surcharge if applicable. A non-resident buying a second property in England faces the standard rates plus 5% for the additional dwelling plus 2% for non-residence, meaning some portions of the price are taxed at an effective SDLT rate of 19%.

Residency for SDLT purposes is assessed over the twelve months before the purchase completes. If you have spent 183 or more days in the UK in that period you are treated as a UK resident for SDLT. The rules are different from income tax residency and the two assessments can give different answers for the same person in the same year. Someone who recently relocated to the UK might be a UK tax resident for income purposes but still a non-resident for SDLT, meaning the surcharge applies.

Scotland, Wales, and shared ownership

Scotland replaced SDLT with its own Land and Buildings Transaction Tax (LBTT) in 2015. The bands and rates differ from England. In 2025/26 LBTT has a nil rate band of £145,000, then 2% up to £250,000, 5% up to £325,000, 10% up to £750,000, and 12% above that. First-time buyers in Scotland get an increased nil rate of £175,000. Additional dwellings in Scotland carry a 6% surcharge. Wales has its own Land Transaction Tax (LTT) with its own bands and its own first-time buyer relief structure.

Shared ownership purchases work differently for SDLT purposes. Buyers can either elect to pay SDLT only on the share they are purchasing (the market value of that share) or pay SDLT on the full market value of the property upfront. Paying on the full value upfront can be more efficient long term because no further SDLT is due on staircasing transactions that take the share above 80%. Paying on the initial share means SDLT is due again on each subsequent staircasing purchase. The right choice depends on how quickly you intend to staircase and the total purchase price.

When budgeting for a purchase, SDLT is one of several significant costs alongside legal fees, survey costs, mortgage arrangement fees, and removal expenses. Our mortgage affordability calculator helps model total purchase costs including stamp duty so you have a complete picture of what the transaction will cost before you make an offer.

When SDLT is not due and common exemptions

Not every property transfer triggers an SDLT charge. Properties transferred as gifts with no consideration paid are generally outside the scope of SDLT, although if there is a mortgage outstanding on the property and the recipient takes on that mortgage, the outstanding mortgage amount counts as consideration and may generate an SDLT charge. Transfers between spouses and civil partners as part of a divorce settlement are exempt from SDLT.

Purchases below £40,000 are exempt. Caravans, mobile homes, and houseboats are not subject to SDLT regardless of price. Zero-carbon homes had a specific exemption but this was abolished from 1 October 2007, so it no longer applies. There is also an exemption for purchases using certain alternative finance arrangements such as Islamic mortgage structures, where HMRC ensures the tax treatment mirrors what a conventional mortgage buyer would pay, avoiding double charges in the two-transaction structure these products use.