Stamp Duty 101: Everything you need to know

When purchasing a property in England or Northern Ireland, one of the key costs to consider is Stamp Duty Land Tax (SDLT). As of 1 April 2025, significant changes have been made to Stamp Duty thresholds and rates, affecting all buyers, including first-time purchasers, existing homeowners, and investors. Here’s what you need to know.

What is Stamp Duty?

Stamp Duty Land Tax (SDLT) is a tax payable to HM Revenue & Customs (HMRC) when you buy property or land over a certain price in England and Northern Ireland. It applies to both freehold and leasehold properties, whether you’re buying outright or with a mortgage. Typically, your solicitor will handle the payment on your behalf as part of the purchase process.

How much is it?

Current Stamp Duty rates from 1 April 2025

The Stamp Duty rates have been adjusted, and the thresholds have changed. The current rates are as follows:

£0 – £125,000: 0%
£125,001 – £250,000: 2%
£250,001 – £925,000: 5%
£925,001 – £1.5 million: 10%
Over £1.5 million: 12%

For example, if you’re purchasing a property for £295,000:

0% on the first £125,000 = £0
2% on the next £125,000 (£125,001 – £250,000) = £2,500
5% on the remaining £45,000 (£250,001 – £295,000) = £2,250
Total Stamp Duty: £4,750

First-time buyer relief

First-time buyers benefit from a relief that reduces the amount of Stamp Duty payable:

No Stamp Duty on properties up to £300,000
5% on the portion between £300,001 and £500,000

If the purchase price exceeds £500,000, the standard Stamp Duty rates apply, and no relief is available.

Additional property surcharge

If you’re purchasing an additional residential property (e.g., a second home or buy-to-let investment), an extra 5% surcharge applies on top of the standard Stamp Duty rates. This means:

£0 – £125,000: 5%
£125,001 – £250,000: 7%
£250,001 – £925,000: 10%
£925,001 – £1.5 million: 15%
Over £1.5 million: 17%

If you sell your previous main residence within 36 months, you may be eligible for a refund of the surcharge.

Use our Stamp Duty Calculator

Purchase Price (£) I'm a first time buyer Property is a buy-to-let or second home Buyer is a non-UK resident

When do you pay Stamp Duty?

You must file an Stamp Duty return and pay any tax due within 14 days of completing the purchase. Your solicitor usually handles this, but it’s your responsibility to ensure it’s done on time to avoid penalties.

Exemptions and Reliefs

Certain transactions are exempt from Stamp Duty or qualify for reliefs, including:

Transfers of property due to divorce or dissolution of a civil partnership
Inheritances
Property purchases by charities for charitable purposes
Right-to-Buy transactions
Purchases by registered social landlords

For a comprehensive list of exemptions and reliefs, visit the official government website.

Other points to consider

You can add your stamp duty payment to your mortgage if you’re unable to pay up front, but it’s not without consequence because it will incur interest charges. Also, adding your stamp duty to your mortgage could mean you end up with a higher interest rate if it increases your loan-to-value substantially.

For example, a mortgage that is over a 30-year term, will incur a significant interest charge over this period, so it’s always cheaper in the long run to pay it straight away if you can.

If you need to borrow more on your mortgage to cover the tax bill, you’ll need to calculate how much stamp duty you will owe and increase your mortgage borrowing to cover it. There are a number of stamp duty calculators online to help with this, but the HMRC has a lot of information available surrounding stamp duty that will help you make a decision when considering your options.

Note: This information is based on the latest available data as of April 2025. For the most current rates and guidance, please refer to the official government website.