Question 1

How is Stamp Duty Land Tax calculated?

Accepted Answer

Stamp Duty Land Tax (SDLT) is a tiered tax on property purchases in England and Northern Ireland (Scotland has Land and Buildings Transaction Tax; Wales has Land Transaction Tax). SDLT applies to the portion of the purchase price that falls within each band — not the whole price at a single rate. For residential purchases (as of 2025), the main bands are: 0% on the first £250,000; 5% on £250,001–£925,000; 10% on £925,001–£1,500,000; 12% above £1,500,000. There is a nil-rate threshold of £300,000 for first-time buyers (where the full purchase price is £500,000 or below), with 5% applying on the portion from £300,001 to £500,000. SDLT rates are set by the UK Government and have changed multiple times in recent years, so always verify current thresholds at the HMRC website or with your solicitor before exchange.

Question 2

What first-time buyer stamp duty relief is available?

Accepted Answer

First-time buyers in England and Northern Ireland benefit from a higher nil-rate SDLT threshold. Provided the purchase price does not exceed £500,000, the first £300,000 is free of SDLT, and the portion from £300,001 to £500,000 is taxed at 5%. If the purchase price exceeds £500,000, the standard residential SDLT rates apply in full — the relief is withdrawn completely rather than tapered. To qualify as a first-time buyer, neither buyer (on a joint purchase) must have previously owned a residential property anywhere in the world. This includes property inherited or gifted, not just purchased. If one applicant on a joint mortgage is not a first-time buyer, the relief is not available and standard rates apply.

Question 3

What is the additional dwelling SDLT surcharge?

Accepted Answer

A 5% surcharge applies on top of the standard SDLT rates when you buy an additional residential property — for example, a buy-to-let, holiday home, or second home — if at the end of the transaction you own more than one residential property. The surcharge applies to every band of the purchase price. On a £300,000 buy-to-let purchase, for example, the standard SDLT would be £2,500 but the surcharge adds 5% of £300,000 = £15,000, making total SDLT £17,500. The surcharge also applies to company purchases of residential property. There is a narrow exception: if you are replacing your main residence — i.e., you have sold or are in the process of selling your previous main home — the surcharge may not apply, provided the previous main residence is sold within three years of the new purchase.

Question 4

Does stamp duty apply to remortgages?

Accepted Answer

No. SDLT is a tax on property transactions — the acquisition of a chargeable interest in land. A remortgage is a change of lender (or a product change with the same lender) secured on a property you already own. No new ownership interest is acquired, so no SDLT is payable. The exception arises when a transfer of equity accompanies the remortgage — for example, adding or removing a partner from the legal title. If a chargeable consideration is paid as part of the transfer (such as taking on a share of the mortgage debt), SDLT may be triggered on that transfer element. Your solicitor handles SDLT compliance and will advise if any transfer of equity element triggers a liability.

Question 5

How does SDLT work for self-employed or complex income buyers?

Accepted Answer

SDLT is calculated purely on the purchase price and ownership structure — it is not affected by how your income is structured. A self-employed buyer, contractor, or company director pays exactly the same SDLT as a PAYE employee buying an equivalent property. The complexity for self-employed and complex income buyers is not the SDLT calculation itself but the mortgage application: lenders assess income differently for complex earners, which affects borrowing capacity and therefore what purchase price you can fund. SDLT must be paid within 14 days of completion, so the amount must be factored into your purchase funds alongside your deposit and legal costs.

Question 6

What SDLT applies to mixed-use or non-residential property?

Accepted Answer

Non-residential and mixed-use property transactions are taxed at lower SDLT rates than pure residential. The non-residential bands are: 0% on the first £150,000; 2% on £150,001–£250,000; 5% above £250,000. Critically, the 5% additional dwelling surcharge does not apply to non-residential or mixed-use transactions. A mixed-use property (e.g., a shop with a flat above) may therefore attract significantly less SDLT than a pure residential purchase of the same price. Whether a property qualifies as mixed-use for SDLT purposes requires a careful assessment of the commercial element; HMRC and the courts have set a high bar for what constitutes a genuine commercial use. Your solicitor will determine the correct SDLT treatment at the time of purchase.

Stamp Duty FAQ