Stamp Duty in London 2026: Complete Guide with Examples

What is Stamp Duty Land Tax (SDLT)?

Stamp Duty Land Tax (SDLT) is a tax paid to HMRC on the purchase of property or land in England. It is calculated as a percentage of the purchase price — but not a flat rate. Instead, it works in bands, like income tax, so you only pay each rate on the portion of the price that falls within that band.

Stamp duty must be paid (and the return submitted to HMRC) within 14 days of completion. Your solicitor will usually handle this on your behalf.

Standard stamp duty rates in 2026

For a standard residential purchase (not a first home, not an additional property), the rates that apply from 1 April 2025 are:

• 0% on the first £125,000
• 2% on the portion from £125,001 to £250,000
• 5% on the portion from £250,001 to £925,000
• 10% on the portion from £925,001 to £1,500,000
• 12% on anything above £1,500,000

First time buyer stamp duty relief

First time buyers in England benefit from significant stamp duty relief. From 1 April 2025, the current rates are:

You pay 0% on the first £300,000 of the purchase price. On the portion between £300,001 and £500,000, you pay 5%. If the purchase price is above £500,000, no first time buyer relief applies and standard residential rates apply to the full purchase price.

This relief can save a first time buyer thousands of pounds. On a £400,000 purchase, the stamp duty is just £5,000 (5% on £100,000 above the £300,000 threshold). A standard mover buying at the same price would pay £10,000. Use our stamp duty calculator for a precise figure based on your purchase price.

Worked examples for London property prices

Here is how stamp duty works in practice for typical London purchase prices. These examples use the rates applying from 1 April 2025.

Second home and buy to let surcharge

If you are purchasing an additional residential property — a buy to let, a second home, or a holiday let — you pay an extra 3% surcharge on top of the standard rates at every band. This applies to the entire purchase price from £1.

On a £300,000 buy to let purchase, the surcharge alone would be £9,000 (3% of £300,000). This is a significant cost to factor into your investment calculations.

If you are replacing your main residence (selling your current home and buying a new one), the surcharge does not apply — even if you own other properties. The surcharge applies when you will own more than one residential property after the purchase completes.

Can you negotiate stamp duty into the purchase price?

Some buyers negotiate with sellers to reduce the asking price by an amount equivalent to the stamp duty, effectively sharing the cost between buyer and seller. This can work in a buyers' market, but in competitive London conditions it is less common.

What you absolutely cannot do is pay for fixtures and fittings at an inflated price to reduce the declared property price — HMRC scrutinises such arrangements closely and the penalties for misrepresentation are severe.