Stamp duty: when do you pay it and how much is it?

If you’re buying a home worth £250,000 or more or a first home priced over £425,000, you must pay stamp duty land tax (SDLT).

This article will tell you more about what stamp duty is, whether you'll need to pay it, and how to calculate it.

What is stamp duty?

SDLT must be paid when buying property in England and Northern Ireland.

In Wales, there is the Land Transaction Tax (LTT) instead, while Scotland has the Land and Buildings Transaction Tax (LBTT), but all three work similarly.

Generally, the more expensive the property you’re buying, the more stamp duty you will pay.

Do I need to pay stamp duty?

If you’re buying a property or a piece of land in the UK, then, in most cases, you will have to pay stamp duty (or the corresponding tax in Wales and Scotland).

For residential property or land, stamp duty is payable if the price is £250,000 or more. From 1 April 2025, the thresholds are changing so stamp duty will become payable on properties worth £125,000 and up.

However, there is relief for first-time buyers (see below).

If you're unsure about the impact of stamp duty on your purchasing power, talk to a mortgage broker.

Stamp duty when buying your next home

If you own a home and are selling it to buy your next one, you will pay stamp duty at the normal rate.

Stamp duty is charged in ‘slices’, so you pay a certain rate on the part of the property’s value that falls within that slice.

You can see how it works in this table:

So for a property bought for £400,000 you would pay nothing on the first £250,000, then 5% (£7,500) on the next £150,000. These rates apply until 31 March 2025.

From 1 April 2025, the following rates will apply:

Do first-time buyers pay stamp duty?

If you’re buying a home for the first time, you’ll get stamp duty relief.

This means you won’t pay stamp duty on the first £425,000, provided the property price is £625,000 or less. Above the £425,000 threshold, stamp duty is charged at 5%.

So, under the current rules, if you were to buy a home for £500,000, your stamp duty would be calculated at 5% of £75,000 – so you’d pay £3,750.

If the property is worth more than £625,000, follow the stamp duty rules for non-first-time buyers (see above).

From 1 April 2025, things will change. First-time buyers won’t have to pay stamp duty on properties worth up to £300,000. There will be 5% stamp duty on properties valued at £300,000 and £500,000, and no relief available above this level.

For example, if you were buying a first home at £350,000, under current rules you would not pay any stamp duty. But, from April 2025, you would pay 5% of the purchase price above £300,001, resulting in a £2,500 bill.

Stamp duty on buy-to-let and second homes

If you’re buying another property to let or a second home (i.e. not selling your main home), your stamp duty will be 5% on top of the normal rates (this increased from 3% in October 2024 following the Autumn Budget).

Stamp duty on non-residential property

For non-residential property (e.g. shops or office buildings) stamp duty is payable if the price is £150,000 or more.

You can find out more about this kind of stamp duty on the HMRC website.

It’s worth asking a mortgage broker about the impact of stamp duty on your purchase price.

When do you pay stamp duty?

Typically you have 14 days to file your stamp duty land tax return and pay any stamp duty owed.

If the SDLT return and payment are not received within 14 days of the property purchase date, HMRC may charge penalties and interest on top of the owed taxes.

How do you pay stamp duty?

The solicitor handling your property purchase often assists with submitting the SDLT return and payment for you, but you can also do it yourself.

However, the ultimate responsibility falls on you as the buyer to ensure timely filing and payment.

You must submit a return (unless you are exempt) even if you won’t need to pay any stamp duty.

Am I eligible to claim a stamp duty refund?

You may qualify for a partial refund on previously paid SDLT when purchasing a new primary residence.

This potential refund applies if you did not immediately sell your previous main home but did sell it within three years of purchasing the new property.

The eligible refund would only be for the additional 5% surcharge for a second home, not the standard stamp duty land tax amount.

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