Stamp duty explained

What stamp duty actually is

Stamp duty is a one off tax on buying property. It is not an annual charge and it is not linked to your income. You pay it once, shortly after the purchase completes, and the amount depends almost entirely on the price you paid and on whether you already own another property.

The name causes confusion because the United Kingdom no longer has a single stamp duty. Since devolution there are three separate taxes doing the same job. England and Northern Ireland use Stamp Duty Land Tax, usually shortened to SDLT, which is collected by HMRC. Scotland uses Land and Buildings Transaction Tax, or LBTT, collected by Revenue Scotland. Wales uses Land Transaction Tax, or LTT, collected by the Welsh Revenue Authority. Most people still call all three stamp duty, and this guide covers all three, but the thresholds and the rates are genuinely different, so where the property sits matters.

The thresholds and bands in England and Northern Ireland

These are the standard residential rates for someone buying a single home in 2026/27. They have applied since 1 April 2025, and the Autumn Budget in November 2025 left them unchanged.

• Up to £125,000. No tax.
• £125,001 to £250,000. 2% on this slice.
• £250,001 to £925,000. 5% on this slice.
• £925,001 to £1.5 million. 10% on this slice.
• Above £1.5 million. 12% on the rest.

The figure people usually mean by the stamp duty threshold is that first £125,000. Below it a standard buyer pays nothing at all. First time buyers get a much higher threshold, which is covered further down.

How the calculation works, with a worked example

This is where most people go wrong. Stamp duty is not a single percentage applied to the whole price. It works in slices, in the same way income tax works. Going one pound over a threshold does not push the entire purchase into the higher rate, it only affects that extra pound.

Take a house bought for £310,000 in England by somebody who owns no other property and is not a first time buyer. The first £125,000 is free of tax. The next £125,000, taking you to £250,000, is charged at 2%, which is £2,500. The remaining £60,000 is charged at 5%, which is £3,000. The total bill is £5,500.

Now take a larger purchase at £750,000. The first £125,000 is free. The slice from £125,000 to £250,000 gives £2,500 at 2%. The slice from £250,000 to £750,000 is £500,000 charged at 5%, which is £25,000. The total is £27,500. Notice that even on a £750,000 house the top rate of 5% never touches the first £250,000.

Scotland: Land and Buildings Transaction Tax

Scotland uses a nil rate band that starts higher but then rises more steeply. The bands for a standard residential purchase are nothing up to £145,000, 2% from £145,001 to £250,000, 5% from £250,001 to £325,000, 10% from £325,001 to £750,000 and 12% above £750,000.

On the same £310,000 house, a Scottish buyer pays nothing on the first £145,000, then 2% on £105,000 which is £2,100, then 5% on £60,000 which is £3,000. The total is £5,100, so slightly less than in England. On expensive properties the position reverses sharply, because the 10% band in Scotland begins at £325,000 rather than £925,000.

Wales: Land Transaction Tax

Wales has the most generous starting point of the three. Nothing is due up to £225,000, then 6% applies from £225,001 to £400,000, 7.5% from £400,001 to £750,000, 10% from £750,001 to £1.5 million and 12% above that.

On our £310,000 house a Welsh buyer pays nothing on the first £225,000 and 6% on the remaining £85,000, giving £5,100. The same purchase therefore costs £5,500 in England, £5,100 in Scotland and £5,100 in Wales. The gap widens considerably at higher prices and when a surcharge applies.

When you pay more than the standard rates

Three situations push the bill up. The first is buying an additional property when you already own one, which adds 5 percentage points to every band in England and Northern Ireland, adds a flat 8% in Scotland, and puts you onto a completely separate and higher set of bands in Wales. The second is buying as a company, where a purchase of a single dwelling above £500,000 can attract a flat 17% charge in England and Northern Ireland. The third is being resident outside the United Kingdom, which adds a further 2% on English and Northern Irish purchases.

When you pay less, or nothing at all

First time buyers in England and Northern Ireland pay nothing up to £300,000 and 5% on anything between £300,001 and £500,000, with the relief withdrawn completely once the price passes £500,000. Scotland gives first time buyers a nil rate band of £175,000 instead of £145,000. Wales has no first time buyer relief at all, because its ordinary threshold is already the highest in the United Kingdom.

There are also situations where no tax arises whatever the value. Property left to you in a will is not a purchase, so no stamp duty is due. Transfers on divorce or dissolution of a civil partnership are normally exempt. A genuine gift with no mortgage taken on is usually outside the charge, although if the person receiving the property takes on the mortgage debt, that debt counts as payment and tax can be due on it.

How and when the tax is paid

In practice your solicitor or conveyancer handles the return and collects the money from you before completion, but the legal duty sits with you as the buyer. In England and Northern Ireland the return must reach HMRC and the tax must be paid within 14 days of completion. Scotland and Wales both allow 30 days. Miss the deadline and you face a penalty plus interest, and the penalty applies even where no tax is actually due but a return was still required.

It is worth checking the figure your conveyancer produces rather than assuming it is right. Conveyancers work to a standard calculator and are not tax advisers. Where a property has an annexe, a paddock, a commercial element, or where you are replacing a main residence, the correct answer can be several thousand pounds lower than the default calculation.

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