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 2025
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 currently benefit from significant stamp duty relief. The rates change significantly from April 2025, so your timing matters:
Until 31 March 2025: First time buyers pay 0% on the first £425,000 and 5% on the portion between £425,001 and £625,000. Properties above £625,000 do not qualify for first time buyer relief.
From 1 April 2025: The threshold reduces — first time buyers pay 0% on the first £300,000 and 5% on the portion between £300,001 and £500,000. Properties above £500,000 no longer qualify for first time buyer relief.
If you are a first time buyer planning to purchase, the earlier threshold (before April 2025) is substantially more generous — particularly relevant for London where property prices frequently exceed £300,000.
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.
Example 1: £300,000 property — first time buyer
0% on £300,000 = £0 stamp duty. First time buyers pay nothing on purchases up to £300,000 from April 2025.
Example 2: £450,000 property — first time buyer
0% on first £300,000 = £0. 5% on £150,000 (£300,001–£450,000) = £7,500. Total stamp duty: £7,500.
Example 3: £450,000 property — standard rate (not first time buyer)
0% on first £125,000 = £0. 2% on £125,000 (£125,001–£250,000) = £2,500. 5% on £200,000 (£250,001–£450,000) = £10,000. Total stamp duty: £12,500.
Example 4: £700,000 property — standard rate
0% on first £125,000 = £0. 2% on £125,000 = £2,500. 5% on £450,000 (£250,001–£700,000) = £22,500. Total stamp duty: £25,000.
Example 5: £1,200,000 property — standard rate
0% on first £125,000 = £0. 2% on £125,000 = £2,500. 5% on £675,000 = £33,750. 10% on £275,000 (£925,001–£1,200,000) = £27,500. Total stamp duty: £63,750.
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.