Stamp duty is one of the largest upfront costs of buying a home — yet it's routinely misunderstood. Many people think they pay the headline rate on the entire purchase price. They don't. This guide explains exactly how UK stamp duty works in 2025, with clear worked examples for home movers, first-time buyers and landlords.
Stamp Duty Land Tax (SDLT) in England and Northern Ireland is a marginal tax, not a flat rate. You pay each rate only on the portion of the purchase price that falls within that band — not on the full price. This is the same principle as income tax bands.
For example, buying at £300,000 does not mean you pay 5% on £300,000 (which would be £15,000). You pay 0% on the first £250,000 and 5% on the remaining £50,000 — a total of £2,500.
| Property price | Standard rate | First-time buyer rate | Additional property rate |
|---|---|---|---|
| £0 – £250,000 | 0% | 0% | 5% |
| £250,001 – £425,000 | 5% | 0% | 10% |
| £425,001 – £625,000 | 5% | 5% | 10% |
| £625,001 – £925,000 | 5% | 5% (standard) | 10% |
| £925,001 – £1,500,000 | 10% | 10% | 15% |
| Above £1,500,000 | 12% | 12% | 17% |
Note: For properties above £625,000, first-time buyer relief does not apply and standard rates are charged on the whole price.
First-time buyers in England and Northern Ireland benefit from a raised threshold: no SDLT on the first £425,000, then 5% on the portion between £425,001 and £625,000. For properties above £625,000, the relief disappears entirely and the standard rates apply from £0.
To qualify as a first-time buyer, every buyer on the purchase must be buying their first residential property. You cannot claim the relief if you have ever owned a residential property anywhere in the world — including properties inherited, received as a gift, or owned jointly with a former partner.
Buyers purchasing a second home, buy-to-let property, or any additional residential property pay a 5% surcharge on top of every SDLT band. This applies from the first pound, not just above a threshold.
You have 3 years to sell your previous main home before the surcharge is applied. If you do sell within 3 years, you can claim a refund of the surcharge from HMRC.
Scotland does not use SDLT. Buyers pay Land and Buildings Transaction Tax (LBTT), administered by Revenue Scotland. The rates and thresholds are entirely different:
| Property price | Standard rate | First-time buyer rate |
|---|---|---|
| £0 – £145,000 | 0% | 0% |
| £145,001 – £175,000 | 2% | 0% (FTB relief) |
| £175,001 – £250,000 | 2% | 2% |
| £250,001 – £325,000 | 5% | 5% |
| £325,001 – £750,000 | 10% | 10% |
| Above £750,000 | 12% | 12% |
Scottish first-time buyers get the 0% threshold raised from £145,000 to £175,000. Additional property purchases attract a 6% surcharge (higher than England's 5%).
Wales uses Land Transaction Tax, administered by the Welsh Revenue Authority. Rates for 2025 are:
| Property price | Rate |
|---|---|
| £0 – £225,000 | 0% |
| £225,001 – £400,000 | 6% |
| £400,001 – £750,000 | 7.5% |
| £750,001 – £1,500,000 | 10% |
| Above £1,500,000 | 12% |
Wales does not have a separate first-time buyer relief. Additional properties in Wales attract a 4% surcharge on all bands.
In England and Northern Ireland, you must file an SDLT return and pay the tax within 14 days of completion. Your solicitor typically handles this on your behalf and will collect the funds before or at completion. In Scotland and Wales, the equivalent deadlines are also 30 days (LBTT) and 30 days (LTT) after the effective date of the transaction.
Stamp duty cannot be added to your mortgage for the main purchase — it is an upfront cash cost. Some mortgage products allow you to borrow extra to cover stamp duty, but this increases your loan size and total interest paid.
Also useful: Mortgage Affordability Calculator — see how much you can borrow alongside your stamp duty cost, and Rent vs Buy Calculator — model whether buying makes sense after all the upfront costs.
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