Stamp Duty Land Tax (SDLT) remains one of the most confusing aspects of buying property in the UK. With significant changes implemented in April 2025, many buyers are facing higher costs and new rules. This comprehensive guide answers the 44 most frequently asked questions about SDLT, based on current HMRC rules and real community discussions.
Basic Questions About Stamp Duty
What is Stamp Duty Land Tax?
Stamp Duty Land Tax (SDLT) is a tax paid by property buyers when purchasing houses, flats, land, or buildings in England and Northern Ireland. Despite its name, it no longer requires physical stamps – it’s a self-assessed transfer tax that must be declared to HMRC.
Example: If you buy a £300,000 house, you’ll pay stamp duty on the portion above the threshold.
What is the current SDLT threshold?
As of April 1, 2025, the threshold for paying SDLT on residential properties is £125,000. This means:
- Properties under £125,000: No SDLT
- Properties over £125,000: SDLT applies to the portion above the threshold
Example: Buying a £200,000 property means you pay SDLT on £75,000 (£200,000 – £125,000).
How do I calculate how much stamp duty I need to pay?
SDLT uses a progressive band system, similar to income tax. Current rates for residential properties (as of April 2025):
Property Value | SDLT Rate |
£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% |
Example: For a £400,000 property:
- First £125,000: £0 (0%)
- Next £125,000 (£125,001-£250,000): £2,500 (2%)
- Next £150,000 (£250,001-£400,000): £7,500 (5%)
- Total SDLT: £10,000
Do I pay stamp duty if my property costs less than £250,000?
Not necessarily. Since April 2025, the zero-rate threshold dropped to £125,000. So:
- Properties under £125,000: No SDLT
- Properties £125,001-£250,000: 2% on the portion above £125,000
Example: A £200,000 property incurs £1,500 SDLT (2% of £75,000).
When do I need to pay SDLT?
You must file an SDLT return and pay the tax within 14 days of completion. Late payment incurs penalties:
- Up to £100 for returns up to 3 months late
- £200 for returns 3-6 months late
- Plus daily penalties of £10 after 6 months
Who pays the stamp duty – buyer or seller?
The buyer always pays stamp duty. It’s their legal responsibility, though sellers sometimes agree to contribute as part of negotiations.
Does my solicitor pay stamp duty on my behalf?
Most solicitors and conveyancers handle SDLT payments as standard practice. They:
- Calculate the amount due
- File the SDLT return
- Pay HMRC on completion day
- Add the cost to their final bill
First-Time Buyer Questions
Am I eligible for first-time buyer relief?
You qualify for First-Time Buyers’ Relief if:
- You and anyone else buying with you are first-time buyers
- You’ve never owned property anywhere in the world
- The property will be your main residence
- The purchase price is £500,000 or less
What counts as a first-time buyer?
A first-time buyer is someone who has never owned a freehold or leasehold interest in a residential property anywhere in the world. This includes:
- Inherited properties
- Foreign properties
- Properties owned through trusts or companies
Do I pay stamp duty if I’m a first-time buyer buying a property for £300,000?
No. First-time buyers pay no SDLT on properties up to £300,000.
Example: First-time buyer purchasing a £280,000 flat pays £0 SDLT.
What if I’m a first-time buyer but my partner has owned property before?
Unfortunately, you’ll pay standard rates. For first-time buyer relief, everyone on the purchase must be a first-time buyer.
Example: If you’re a first-time buyer but your partner previously owned a flat, you’ll pay standard SDLT rates on your joint purchase.
When does first-time buyer relief end?
Current first-time buyer rates (effective April 2025):
- 0% on properties up to £300,000
- 5% on the portion £300,001-£500,000
- Standard rates apply to properties over £500,000
Example: First-time buyer purchasing a £450,000 house:
- First £300,000: £0
- Next £150,000: £7,500 (5%)
- Total: £7,500
Second Properties and Buy-to-Let
Do I pay extra stamp duty on a second property?
Yes. If you own another residential property worth £40,000+ anywhere in the world, you pay an additional 5% surcharge on top of standard rates (increased from 3% in October 2024).
What is the additional stamp duty rate for buy-to-let properties?
Buy-to-let properties incur the 5% surcharge on all rate bands:
Property Value | Standard Rate | Buy-to-let Rate |
£0 – £125,000 | 0% | 5% |
£125,001 – £250,000 | 2% | 7% |
£250,001 – £925,000 | 5% | 10% |
£925,001 – £1.5 million | 10% | 15% |
Over £1.5 million | 12% | 17% |
Example: £300,000 buy-to-let property:
- First £125,000: £6,250 (5%)
- Next £125,000: £8,750 (7%)
- Next £50,000: £5,000 (10%)
- Total: £20,000
When do I pay the higher rate of stamp duty?
You pay higher rates if:
- You own another residential property worth £40,000+ on completion day
- The property isn’t replacing your main residence
- You haven’t sold your previous main home
Can I avoid the 5% surcharge if I’m replacing my main residence?
Yes! If you’re simultaneously selling your main residence and buying a new one, you pay standard rates. The key is “replacement” – not adding to your property portfolio.
How long do I have to sell my previous home to avoid the surcharge?
You have 3 years from the purchase date to sell your previous main residence and claim a refund of the 5% surcharge.
Can I get a refund of the extra 5% if I sell my old home later?
Yes, but you must:
- Sell within 3 years of the new purchase
- Apply for the refund within 12 months of the later of:
- Sale completion date
- Filing date of your original SDLT return
Example: You buy a new main home in June 2025 and sell your old one in March 2027. You have until March 2028 to claim your refund.
Non-Resident Questions
Do non-UK residents pay different stamp duty rates?
Yes. Non-UK residents pay an additional 2% surcharge on top of all other SDLT rates when buying residential property in England and Northern Ireland.
How is UK residence determined for stamp duty purposes?
You’re UK resident for SDLT if you spend 183 days or more in the UK during the 12 months before your property purchase.
Example: Buying on June 1, 2025? Count days from June 2, 2024, to June 1, 2025.
Can I get a refund if I become UK resident after buying?
Yes. You have a two-year window to accumulate 183 days in any continuous 365-day period. The window runs from 364 days before purchase to 365 days after.
Example: Purchase on June 1, 2025. Your window runs from June 3, 2024, to June 1, 2026.
Complex Ownership Situations
What happens if I own multiple properties and buy another?
Each additional purchase triggers the 5% surcharge if you own other residential properties worth £40,000+. There’s no ceiling – it applies to every purchase.
Do married couples count as one entity for stamp duty?
For the 5% surcharge purposes, married couples living together are treated as one unit. If either spouse owns property, both are considered to own it.
Exception: For non-resident surcharge, if one spouse is UK resident, both are treated as UK resident (avoiding the 2% surcharge).
What if my spouse owns property but I don’t?
You’re still liable for higher rates. Married couples are treated as owning property jointly for SDLT purposes, regardless of whose name is on the deeds.
Is there a ceiling on stamp duty for multiple property purchases?
No. The 5% surcharge applies to every additional residential property purchase, regardless of how many you already own.
Refunds and Reliefs
How do I claim a stamp duty refund?
Common refund scenarios:
- Sold previous main residence within 3 years (higher rate refund)
- Became UK resident after non-resident purchase
- Property was uninhabitable (different rates may apply)
Apply using HMRC’s online services or Form SDLT60.
Can I claim relief for uninhabitable properties?
Potentially. If a property is genuinely uninhabitable, it might qualify for non-residential rates instead of residential rates, significantly reducing SDLT.
Evidence needed:
- Structural surveys
- Photos of defects
- Building control notices
- Professional reports
What evidence do I need for an uninhabitable property claim?
Strong evidence includes:
- No heating, water, or electricity
- Structural damage making it unsafe
- Lack of kitchen or bathroom facilities
- Planning enforcement notices
Example: A £400,000 “property” that’s actually a derelict shell might qualify for non-residential rates (0-5%) instead of residential rates (£10,000 SDLT).
How long do I have to claim a refund?
Depends on the refund type:
- Higher rate refunds: 12 months from the later of sale completion or SDLT return filing
- Non-resident refunds: Usually 12 months from becoming resident
- Other refunds: Generally 4 years from the original transaction
Regional Differences
Does stamp duty apply in Scotland and Wales?
No. Different systems apply:
- Scotland: Land and Buildings Transaction Tax (LBTT)
- Wales: Land Transaction Tax (LTT)
Each has different rates and thresholds.
What is Land and Buildings Transaction Tax?
Scotland’s equivalent to SDLT, with different rates:
- 0% up to £145,000
- 2% on £145,001-£250,000
- 5% on £250,001-£325,000
- 10% on £325,001-£750,000
- 12% over £750,000
What is Land Transaction Tax?
Wales’s system since 2018, with rates:
- 0% up to £180,000
- 3.5% on £180,001-£250,000
- 5% on £250,001-£400,000
- 7.5% on £400,001-£750,000
- 10% on £750,001-£1.5m
- 12% over £1.5m
Rental Properties and Tenants
Do tenants ever have to pay stamp duty?
Rarely, but yes. Long-term tenants may owe SDLT if the Net Present Value (NPV) of their total rent exceeds £125,000.
When would a tenant be liable for SDLT?
This applies to residential leases where:
- Total rent over the lease term (NPV) exceeds £125,000
- SDLT is 1% of the amount over £125,000
- Most common with very long leases or high-rent properties
Example: A 10-year lease at £15,000/year = £150,000 NPV. SDLT = 1% of £25,000 = £250.
Payment and Compliance
What happens if I pay stamp duty late?
Penalties include:
- £100 for returns up to 3 months late
- £200 for returns 3-6 months late
- £10 daily penalty after 6 months
- Interest on unpaid tax
- Possible further penalties up to 100% of tax due
Can I pay stamp duty in instillments?
No. SDLT must be paid as a lump sum within 14 days of completion. No payment plans are available.
Can I pay stamp duty with a credit card?
No. HMRC doesn’t accept credit card payments for SDLT. Accepted methods:
- Bank transfer
- Debit card
- Cheque
- Online banking
What forms do I need to complete?
Your solicitor typically handles the SDLT return (SDLT1 form). If doing it yourself, you’ll need:
- Property details
- Purchase price
- Buyer information
- Any reliefs claimed
Rate Changes and Timing
Are stamp duty rates changing?
The major changes occurred April 1, 2025, when temporary increases ended:
- Standard threshold fell from £250,000 to £125,000
- First-time buyer threshold fell from £425,000 to £300,000
- Buy-to-let surcharge increased from 3% to 5% (October 2024)
What were the COVID stamp duty holidays?
Temporary reductions ran:
- July 2020-June 2021: £500,000 threshold
- July-September 2021: £250,000 threshold
- September 2022-March 2025: £250,000 threshold with enhanced first-time buyer relief
Should I complete my purchase before future changes?
Any announced changes typically have effective dates. Currently, no further changes are scheduled, but budget announcements could bring new rates.
Investment and Commercial
How does stamp duty affect property investment returns?
SDLT significantly impacts investment returns:
- Immediate cost reducing available capital
- Affects break-even calculations
- Higher rates for additional properties reduce yields
Example: £300,000 buy-to-let requires £20,000 SDLT upfront – equivalent to 1.3 years’ gross rental income at £1,250/month.
Are there different rates for commercial properties?
Yes. Non-residential/mixed-use rates are:
- 0% up to £150,000
- 2% on £150,001-£250,000
- 5% over £250,000
What about mixed-use properties?
Properties with both residential and commercial elements use non-residential rates, which are generally lower than residential rates.
Example: A £400,000 shop with flat above pays £7,500 SDLT (non-residential rates) vs £10,000 (residential rates).
Key Takeaways
For First-Time Buyers:
- Zero SDLT up to £300,000
- 5% on £300,001-£500,000
- Standard rates over £500,000
For Home Movers:
- SDLT starts at £125,000
- Main residence replacements avoid surcharge
- 3-year window for higher rate refunds
For Investors:
- 5% surcharge on all bands
- No relief for buy-to-let
- Consider timing around rate changes
Payment Rules:
- 14-day deadline is strict
- Solicitors usually handle payment
- Late payment incurs penalties
Remember: SDLT rules are complex and fact-specific. This guide covers common scenarios, but unusual situations may require professional advice. Always consult with a qualified solicitor or tax advisor for your specific circumstances.
