UK Stamp Duty explained
What Stamp Duty is
Stamp Duty Land Tax (SDLT) is a tax you pay when you buy property or land above a certain price in England and Northern Ireland. (Scotland has LBTT and Wales has LTT โ different systems with different thresholds.) Like Income Tax, SDLT is tiered: you pay each rate only on the portion of the price that falls inside that band, not the whole price at one rate.
The standard bands
For a main home, SDLT is charged in slices: 0% up to the nil-rate threshold, then rising percentages on the value within each higher band, up to 12% on the most expensive portion of multi-million-pound homes. Because itโs tiered, a property just over a threshold only pays the higher rate on the few pounds above it โ there is no "cliff edge" on the whole price.
First-time buyer relief
First-time buyers pay no SDLT on the first portion of the price and a reduced rate above it, up to a purchase-price cap. Above that cap the relief is lost and standard rates apply to the whole purchase. This relief can save a first-time buyer thousands and is one of the biggest reasons to check your status before completing.
The second-home surcharge
If youโre buying an additional property โ a buy-to-let or a second home โ a surcharge is added on top of every standard band. That materially increases the bill on investment purchases, so landlords and second-home buyers should always model the surcharge before committing.