What is stamp duty?

Stamp duty is a tax you might need to pay when buying a home.

Its full name is Stamp Duty Land Tax (SDLT), which is applied to property or land purchases in England and Northern Ireland. Scotland and Wales have their own versions – Land and Buildings Transaction Tax (LBTT) in Scotland, and Land Transaction Tax (LTT) in Wales.

What is stamp duty, and why do I need to pay it?

Stamp duty is a tax that’s charged on property purchases. Think of it as a fee you pay to the government when you buy a home. The amount varies based on the property price and your situation – for instance, whether you’re a first-time buyer or buying an additional property.

Who has to pay stamp duty when buying a home?

Most people buying a property over the minimum threshold need to pay stamp duty.

However, there are some key differences in who pays what:

• First-time buyers get special rates and pay less
• People buying additional properties usually pay extra
• Non-UK residents pay an additional 2% on top of standard rates
• If you’re buying in Scotland or Wales, different rates apply

There are also a series of reliefs and exemptions. Detailed information on these can be found on government websites for England, Scotland and Wales.

How is stamp duty calculated?

Stamp duty works in a similar way to income tax – you pay different rates on different portions of the property price.

Our calculator can help you work out the exact amount, but here’s a simple example:

If you’re not a first-time buyer and you buy a house in England for £295,000, you’ll pay:

• 0% on the first £125,000 = £0
• 2% on the portion between £125,001 and £250,000 = £2,500
• 5% on the final £45,000 = £2,250
• Total stamp duty = £4,750

If you are a first-time buyer, you will not pay any stamp duty on the first £300,000.

What is the current stamp duty threshold in England?

Stamp duty relief was in place from September 2022 to 31 March 2025, though this relief has now ended.

Stamp duty rates work on a tiered system, which means you only pay the higher rate on the portion of the property price that falls within that band. From 1 April 2025, stamp duty thresholds are:

• £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 more information on stamp duty rates in England, visit the government’s website. You can also use our stamp duty calculator to work out exactly how much you’ll need to pay based on your circumstances.

What is the current stamp duty threshold in Scotland?

If you’re buying property in Scotland, you’ll pay Land and Buildings Transaction Tax (LBTT) instead of stamp duty. This is a fully devolved tax, which means the Scottish Government sets its own rates and makes decisions independently from the UK Government’s stamp duty announcements.

The current LBTT rates are:

• Up to £145,000: 0%
• £145,001 – £250,000: 2%
• £250,001 – £325,000: 5%
• £325,001 – £750,000: 10%
• Over £750,000: 12%

These rates will stay at the current level until 2026. For the most up-to-date information on LBTT, visit Revenue Scotland.

What is the current stamp duty threshold in Wales?

When buying property in Wales, you’ll pay Land Transaction Tax (LTT) rather than stamp duty. This tax is managed by the Welsh Revenue Authority (WRA) and has been in place since April 2018. Unlike England and Scotland, Wales doesn’t offer specific relief for first-time buyers, but its starting threshold is generally higher than in other parts of the UK.

The current LTT rates are:

• Up to £225,000: 0%
• £225,001 – £400,000: 6%
• £400,001 – £750,000: 7.5%
• £750,001 – £1.5 million: 10%
• Over £1.5 million: 12%

For detailed information about LTT and to check if a property falls within Wales for tax purposes, visit the Welsh Government’s LTT pages.

Are there any exemptions or relief for first-time buyers?

Yes. In England, first-time buyers won’t pay any stamp duty until the property price reaches the thresholds listed below.

From 1 April 2025:

• No stamp duty up to £300,000
• 5% on the portion between £300,001 and £500,000
• If the property costs more than £500,000, you won’t qualify for the relief. You’ll pay the same amount of stamp duty as someone not buying their first home, as detailed above

In Scotland, first-time buyers gain a small relief on LBTT, as the 2% threshold begins at £175,000 instead of £145,000.

If you are unsure about the rate of stamp duty you will need to pay, check out our stamp duty calculator.

What happens if I buy a property just under or over the stamp duty threshold?

The thresholds work on a sliding scale, so going just over doesn’t mean you’ll suddenly pay a huge amount more. You only pay the higher rate on the portion above the threshold.

For example, from April 2025, if you are not a first-time buyer and buy a house for £126,000, you will be liable to pay:

• 0% on the first £125,000 = £0
• 2% on the extra £1,000 = £20
• Total stamp duty = £20

But if you bought at £124,000, you’d pay no stamp duty at all. This shows how the system is designed to be fair – you’re only ever paying the higher rate on the amount above each threshold.

Use our calculator to see exactly how different purchase prices affect your stamp duty.

When do I need to pay stamp duty, and what are the penalties for late payment?

You need to pay stamp duty within 14 days of completing your property purchase. Your conveyancer usually handles this for you. If you miss the deadline, you might face penalties and interest charges.

Does stamp duty apply to shared ownership properties?

Yes, stamp duty does apply to shared ownership properties, but the rules are a bit different.

When you buy through shared ownership, you have two options for paying your stamp duty:

1. Make a one-off payment based on the full market value of the property upfront. This means you won’t need to pay any more stamp duty if you later increase your share.
2. Pay stamp duty only on the share you’re buying now. This can help with initial costs, but you might need to pay more stamp duty later if you buy additional shares (known as ‘staircasing’).

The choice you make can affect how much stamp duty you pay overall. It’s worth discussing these options with your housing association or solicitor to decide what works best for your circumstances. Some people prefer to pay upfront to avoid future payments, while others find it helpful to spread the cost.

Remember, if you’re a first-time buyer, you might still qualify for first-time buyers’ relief on a shared ownership purchase. Use our calculator to understand your options.

Are there different stamp duty rates for second homes, or if I’m buying a home to rent out?

Yes. When buying an additional property, whether it’s a holiday home, buy-to-let property or second home, you’ll usually need to pay an extra 5% on top of the normal stamp duty rates. This additional rate applies even if the property you’re buying will become your main home but you haven’t yet sold your current one.

However, there’s some good news if you’re temporarily in this situation. If you sell your previous main home within 36 months of buying the new one, you can apply for a refund of the extra 5% you paid.

For buy-to-let investors and second-home buyers, it’s important to factor this additional cost into your calculations from the start. The extra 5% can significantly impact the overall cost of your purchase. Our calculator can help you work out the exact amount you’ll need to pay, including this additional rate.

How do I pay stamp duty, and do I need to arrange payment myself, or does a conveyancer handle it?

Most people’s solicitors or conveyancers handle the stamp duty payment as part of the buying process. They’ll collect the money from you before completion, and make sure it’s paid within the 14-day deadline.

Does stamp duty apply to leasehold properties or only to freehold properties?

Stamp duty applies to both freehold and leasehold properties.

For leaseholds, you might need to pay:

• Stamp duty on the purchase price of the lease
• An additional 1% on any rent over £125,000 from April 2025

What is the difference between stamp duty and land tax (or regional equivalents)?

While they represent very similar taxes on property purchases, there are different names and rates depending on where you’re buying:

• England and Northern Ireland: Stamp Duty Land Tax (SDLT)
• Scotland: Land and Buildings Transaction Tax (LBTT)
• Wales: Land Transaction Tax (LTT)

Has stamp duty ever been temporarily reduced, and could it happen again?

Yes, stamp duty has been temporarily reduced during certain periods, such as during the pandemic to help boost the property market. Future reductions would depend on government policy.

What rate do I pay if my property requires renovation?

For land transactions involving property in England and Northern Ireland, there is a lower rate of stamp duty tax if a property is found to be “uninhabitable” or “not suitable for use as a dwelling”.

However, HMRC warns that this only affects a small minority of buildings and that a very high proportion of claims that they receive in relation to this area are wrong.

To help, you can find out more information on the government’s website:  Not suitable for use as a dwelling (uninhabitable dwellings)

Where can I check how much stamp duty I might need to pay?

Use our stamp duty calculator to get an accurate figure based on your circumstances.