How does stamp duty work?

Stamp Duty Land Tax (SDLT) is a progressive tax applied to residential properties in England and Northern Ireland. Instead of paying a flat fee, you’re taxed on the portion of the property price that falls within each SDLT rate band. This means different parts of your property price are charged at different percentages.

Current SDLT rates (2026):

0% on the first £125,000
2% on £125,001 – £250,000
5% on £250,001 – £925,000
Higher rates apply above this threshold

These bands apply to standard residential purchases.

How much is stamp duty?

There is no single Stamp Duty rate because SDLT is calculated using different rate bands.

The amount you pay depends on which parts of the property price fall into each band.

Example: Buying a home for £275,000

0% on the first £125,000 = £0
2% on the next £125,000 = £2,500
5% on the final £25,000 = £1,250

Total Stamp Duty payable: £3,750

Note: Leasehold properties may include extra SDLT charges based on lease premiums and rent value.

Stamp duty for first time buyers

If you’re buying your first home, you may qualify for SDLT relief that reduces how much you pay.

£0 – £300,000: No Stamp Duty to pay
£300,001 – £500,000: Pay 5% on the portion above £300,000
Over £500,000: No first‑time buyer relief applies — standard rates will be charged

Example:
A first‑time buyer purchasing a £400,000 home pays 5% on £100,000 = £5,000.

This relief is designed to support first‑time buyers by reducing upfront costs and improving affordability.

Stamp duty for second steppers

If you’re buying an additional residential property costing more than £40,000 — such as a second home or buy‑to‑let — you’ll pay an extra 3% surcharge on top of the standard SDLT rates.

This higher rate applies if:

You already own a home
You have not yet sold your previous home
You are purchasing an investment or holiday property

If your previous home is sold within 3 years of buying your new one, you can apply for a refund of the extra 3% surcharge, as you will no longer be classed as owning two properties.

This higher rate does not apply to caravans, mobile homes, or houseboats.

When You Need to Pay Stamp Duty

Homebuyers have 14 days from completion to submit their SDLT return and pay any tax due. While most solicitors handle this process for you, the buyer is legally responsible for ensuring the return is filed and paid on time.

Where to Find More Information

You can view the latest Stamp Duty thresholds, exemptions, and relief options — including guidance for first‑time buyers and second‑home surcharges — on the official UK Government website here

Can stamp duty be added to a mortgage?

Usually stamp duty is paid before you start your mortgage, up to 14 days after you've completed your new home purchase. Typically the solicitor or conveyancer will require you to pay them before your completion date and you are responsible for making sure it’s all submitted on time. However, it is possible to add the stamp duty charges onto your mortgage. This will incur interest, just like your mortgage, but it means you can pay monthly rather than the upfront cost before moving into your home. This will depend on your mortgage lender, so it's important to check with your mortgage lender beforehand.

Can stamp duty be paid in installments?

It is not possible for you to pay your stamp duty in installments. Usually, you have 14 days after the date you completed the purchase of your home (completion day/the day you move in) to pay your stamp duty land tax. If you don’t submit your stamp duty land tax return within the 14 days, you could be charged a penalty of up to £200, and charged interest on the amount you have to pay.

How is stamp duty calculated?

If you’re buying a residential home in the UK worth over £250,000, you’ll have to pay stamp duty land tax on your purchase. Whether you’re buying outright or with a mortgage, stamp duty land tax will still apply.

There isn’t one standard stamp duty charge for every house in the UK. Stamp duty has several rate bands, and how much you pay will be calculated on the part of the property purchase price falling within each band.

Here is an example of buying a home worth £275,000:

On the first £250,000 0% £0
On the next £25,000 5% £1,250

Total Stamp Duty Land Tax payable: £1,250

*Residential leasehold properties are charged differently.

How is stamp duty paid?

Usually, your solicitor will deal with your stamp duty and any payment due, although you can do it yourself. Although it could be your solicitor dealing with it, it’s still classed as your responsibility to ensure its paid on time. You can send your stamp duty land tax return online or through the post. You can find out more about the ‘how’s, who’s and why’s’ of filling in your stamp duty land tax return on the Government website.

What stamp duty will I pay?

The stamp duty you pay will depend on the value of your home. Although there is currently a stamp duty holiday running until 31st March 2021, here is the eligibility for stamp duty for first time buyers, second steppers and shared ownership home owners. First time buyer If you’re buying your first home, you won’t have to pay any stamp duty unless your home is worth more than £300,000. Stamp duty relief for first time buyers buying a house for £300,000 or less has been in place since November 2017. If you’re a first time buyer and purchasing a home worth between £300,000 and £500,000, you’ll have to pay stamp duty land tax at 5% on the amount of the purchase price in excess of £300,000. First time buyers who are purchasing a property for more than £500,000 will not be entitled to any relief and will pay stamp duty land tax at the normal rates. Second steppers If you’re buying an additional residential property over £40,000, you’ll have to pay an extra 3% in stamp duty on top of current rates. *This increased rate doesn’t apply to caravans, mobile homes or houseboats. Sometimes there is a delay in selling your previous home, which will affect the stamp duty you pay. If there is a delay in selling your previous home, you will have to pay a higher stamp duty rates as you will own 2 properties. However, if you sell or give away your previous main home within 3 years of buying your new one, you can apply for a refund of the higher stamp duty land tax part of your stamp duty bill. Shared Ownership homeowners Since October 2018, first time buyers under shared ownership schemes can claim first-time buyers stamp duty relief on homes worth up to £500,000. If you purchased your home on or after 22nd November 2017, you’ll be eligible to claim back first-time buyers stamp duty relief.

What stamp duty do I pay on a second home?

If you decide to buy another home such as a buy-to-let home or a holiday home, you will have to pay an extra 3% stamp duty. Please note this doesn’t apply to caravans, mobile homes or houseboats.