Stamp Duty Land Tax

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1. Overview

You must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price in England and Northern Ireland.

The tax is different if the property or land is in:

You pay the tax when you:

Thresholds

The threshold is where SDLT starts to apply. If you buy a property for less than the threshold, there’s no SDLT to pay.

The current SDLT thresholds are:

There were different thresholds and rates for residential properties before 23 September 2022.

How much you pay

How much you pay depends on:

For example, if you’re buying a residential property there are different rates of SDLT if:

  • you’re a first-time buyer
  • you already own a property and you’re buying an additional property
  • you’re not a UK resident

You can use HM Revenue and Customs’ (HMRC) Stamp Duty Land Tax calculator to work out how much tax you’ll pay.

The value you pay SDLT on (the ‘consideration’)

The total value you pay SDLT on (sometimes called the ‘consideration’) is usually the price you pay for the property or land.

Sometimes it might include another type of payment like:

  • goods
  • works or services
  • release from a debt
  • transfer of a debt, including the value of any outstanding mortgage

Find out how to work out the consideration if your situation is complicated.

How and when to pay

Send an SDLT return to HMRC and pay the tax within 14 days of completion.

If you have a solicitor, agent or conveyancer, they’ll usually file your return and pay the tax on your behalf on the day of completion. They’ll then add the tax to their fees.

If they do not do this for you, you can file a return and pay the tax yourself.

You may be charged penalties and interest if you do not file your return and make your payment within 14 days of completion.

2. Residential property rates

You usually pay Stamp Duty Land Tax (SDLT) on increasing portions of the property price when you buy residential property, for example a house or flat.

SDLT only applies to properties over £250,000.

The amount you pay depends on:

Use the SDLT calculator to work out how much tax you’ll pay.

There were different thresholds and rates for residential properties before 23 September 2022.

Rates for a single property

You pay stamp duty at these rates if, after buying the property, it is the only residential property you own. You usually pay 3% on top of these rates if you own another residential property.

Property or lease premium or transfer value SDLT rate
Up to £250,000 Zero
The next £675,000 (the portion from £250,001 to £925,000) 5%
The next £575,000 (the portion from £925,001 to £1.5 million) 10%
The remaining amount (the portion above £1.5 million) 12%

Example

In October 2022 you buy a house for £295,000. The SDLT you owe will be calculated as follows:

  • 0% on the first £250,000 = £0
  • 5% on the final £45,000 = £2,250
  • total SDLT = £2,250

Use the SDLT calculator to work out how much tax you’ll pay.

If you’re buying your first home

You can claim a discount (relief) if the property you buy is your first home. This means you’ll pay:

  • no SDLT up to £425,000
  • 5% SDLT on the portion from £425,001 to £625,000

You’re eligible if you and anyone else you’re buying with are first-time buyers.

If the price is over £625,000, you cannot claim the relief. Follow the rules for people who’ve bought a home before.

Example

You are a first-time buyer and purchase a property for £500,000. The SDLT you owe will be calculated as:

  • 0% on the first £425,000 = £0

  • 5% on the remaining £75,000 = £3,750

  • total SDLT = £3,750

New leasehold sales and transfers

When you buy a new residential leasehold property you pay SDLT on the purchase price of the lease (the ‘lease premium’) using the rates above.

If the total rent over the life of the lease (known as the ‘net present value’) is more than the SDLT threshold (currently £250,000), you’ll pay SDLT at 1% on the portion over £250,000.

This does not apply to existing (‘assigned’) leases.

You can work out how much SDLT you’ll pay for your residential lease using HMRC’s:

Higher rates for additional properties

You’ll usually have to pay 3% on top of SDLT rates if buying a new residential property means you’ll own more than one.

Use the SDLT calculator or check the higher rates to work out how much tax you’ll pay.

If you’re replacing your main residence

You will not pay the extra 3% SDLT if the property you’re buying is replacing your main residence and that has already been sold.

If you have not sold your main residence on the day you complete your new purchase you’ll have to pay higher rates. This is because you own 2 properties.

You can apply for a refund if you sell your previous main home within 36 months.

If it takes longer than 36 months to sell your previous main home

You may still be able to get a refund of the extra 3% SDLT if all of the following apply:

  • you purchased your new home on or after 1 January 2017
  • exceptional circumstances stopped you from selling your old home, for example government restrictions because of coronavirus (COVID-19) or a public authority blocking the sale
  • you have now sold your old home

To claim a refund, write to HMRC and explain why the sale took longer than 36 months.

Include:

  • your details
  • details of the main buyer - if different to your own
  • details of the exceptional circumstances that prevented the sale of your property
  • details of the property where higher rate SDLT was paid - including the address, date of purchase and SDLT unique transaction reference number
  • details of the previous main residence - including the address, date of sale and SDLT unique transaction reference number
  • the amount of higher rate SDLT paid
  • the amount of tax you’re asking for a repayment of
  • a bank account and sort code for the person receiving the payment

Rates if you’re not a UK resident

If you’re not present in the UK for at least 183 days (6 months) during the 12 months before your purchase you are ‘not a UK resident’ for the purposes of SDLT.

You’ll usually pay a 2% surcharge if you’re buying a residential property in England or Northern Ireland.

You may not have to pay a surcharge on certain properties, transactions or if you’re a particular type of buyer. Check the rules on who has to pay the surcharge, when you do not have to pay, and if you can claim relief.

If you have to pay the surcharge, you’ll also have to pay any other rates of SDLT that apply, for example:

  • if you already own a property and you’re buying an additional property
  • if you’re a first-time buyer

Use the SDLT calculator to work out how much tax you’ll pay.

Special rates

There are different SDLT rules and rate calculations for:

3. Rates for non-residential and mixed land and property

You pay Stamp Duty Land Tax (SDLT) on increasing portions of the property price (or ‘consideration’) when you pay £150,000 or more for non-residential or mixed (also known as ‘mixed use’) land or property.

You must still send an SDLT return for most transactions under £150,000.

Non-residential property includes:

  • commercial property, for example shops or offices
  • property that isn’t suitable to be lived in
  • forests
  • agricultural land that’s part of a working farm or used for agricultural reasons
  • any other land or property that is not part of a dwelling’s garden or grounds
  • 6 or more residential properties bought in a single transaction

You pay residential SDLT rates on agricultural land if it’s sold as part of the garden or grounds of a dwelling, for example a cottage with fields.

A ‘mixed’ property is one that has both residential and non-residential elements, for example a flat connected to a shop, doctor’s surgery or office.

Use the SDLT calculator to work out how much tax you’ll pay.

Freehold sales and transfers

You can also use this table to work out the SDLT rate for a lease premium.

Property or lease premium or transfer value SDLT rate
Up to £150,000 Zero
The next £100,000 (the portion from £150,001 to £250,000) 2%
The remaining amount (the portion above £250,000) 5%

Example

If you buy a freehold commercial property for £275,000, the SDLT you owe is calculated as follows:

  • 0% on the first £150,000 = £0
  • 2% on the next £100,000 = £2,000
  • 5% on the final £25,000 = £1,250
  • Total SDLT = £3,250

New leasehold sales and transfers

When you buy a new non-residential or mixed leasehold you pay SDLT on both the:

  • purchase price of the lease (the ‘lease premium’) using the rates above
  • value of the annual rent you pay (the ‘net present value’)

These are calculated separately then added together.

If you buy an existing (‘assigned’) lease, you only pay SDLT on the lease price (or ‘consideration’).

The net present value (NPV) is based on the total rent over the life of the lease. You do not pay SDLT on the rent if the NPV is less than £150,000.

Net present value of rent SDLT rate
£0 to £150,000 Zero
The portion from £150,001 to £5,000,000 1%
The portion above £5,000,000 2%

How much you’ll pay

You can work out how much SDLT you’ll pay for your non-residential lease using HM Revenue and Customs’ (HMRC):

You may pay a higher rate of SDLT for multiple purchases or transfers from the same seller.

4. Land and property transfers

You may have to pay Stamp Duty Land Tax (SDLT) if the ownership of land or property is transferred to you in exchange for any payment (or ‘consideration’).

The rules around SDLT depend on the specific circumstances surrounding the transfer.

HM Revenue and Customs (HMRC) has guidance on transfers:

  • as a result of marriage, civil partnerships or moving in together
  • on divorce, separation or the end of a civil partnership
  • of jointly owned property or land
  • if the larger share is given as a gift
  • given as a gift or left in a will
  • to or from a company

5. Shared ownership property

You may have to pay Stamp Duty Land Tax (SDLT) when you buy a property through a shared ownership scheme run by an approved public body.

This includes:

  • local housing authorities
  • housing associations
  • housing action trusts
  • the Northern Ireland Housing Executive
  • the Commission for the New Towns
  • development corporations

You can choose to either:

  • make a one-off payment based on the market value of the property (‘market value election’)
  • pay SDLT in stages

If you’re a first-time buyer and buying your first share, you may be able to reduce the amount of tax you pay by claiming relief.

Market value election

Submit a return and pay SDLT at the residential rate. Use the total market value of the property to calculate how much to pay - even if you’re only buying a share.

You do not pay any more SDLT after this, even if you buy a bigger share in the property later on.

Example

You pay £140,000 to buy a 50% share of a property with a market value of £280,000.

You have to pay SDLT of £1,500 (0% on £250,000 and 5% on £30,000).

HM Revenue and Customs (HMRC) has guidance on how much SDLT you’ll pay if you do not have the right to the freehold.

Paying in stages

You make your first SDLT payment on the price you pay for the lease (the ‘lease premium’) if it’s above the SDLT threshold for residential rates. If the lease premium is below the threshold, you do not pay SDLT at this point - but you still have to submit a return.

You may have to pay extra SDLT if the total rent over the life of the lease (known as the ‘net present value’) is more than the SDLT threshold.

Work this out on HMRC’s SDLT calculator. You pay SDLT of 1% on the amount over the threshold - add this to any SDLT you’re paying on the lease premium.

SDLT if you buy more shares

If you buy any more shares in the property, you do not have to pay any more SDLT or send a return to HMRC until you own more than an 80% share.

Once your share of the property goes over 80% you must send a return and pay SDLT on:

  • the transaction that took you over 80%
  • any transactions after that

Calculating your SDLT

To work out the SDLT if you buy more shares that take you over 80%:

  1. Work out the SDLT due on the total you’ve paid for the property to date - include any amounts you did not pay tax on. Use the residential rate that applies at the time you bought the new share. For example, if you’ve paid £260,000 in total so far, the total SDLT due is £500 (0% on £250,000 and 5% on £10,000).

  2. Divide the amount you’re paying for this share by the total amount you’ve paid for the property to date. For example, if you’re paying £65,000 for this share, divide £65,000 by £260,000 = 0.25.

  3. Multiply the two figures, for example SDLT of £500 multiplied by 0.25 = £125. This is the amount you would need to pay in SDLT for this share.

Additional tax if payments are linked

You may have to pay extra SDLT on previous shares if they become ‘linked’ to later shares. Shares only become linked once you own over 80% of the property.

You can read more about how much SDLT you’ll pay when you buy more shares.

6. Reliefs and exemptions

You may be eligible for Stamp Duty Land Tax (SDLT) reliefs if you’re buying your first home and in certain other situations. These reliefs can reduce the amount of tax you pay.

You must complete an SDLT return to claim relief, even if no tax is due.

HM Revenue and Customs (HMRC) has guidance on SDLT reliefs for:

  • first-time buyers
  • multiple dwellings
  • building companies buying an individual’s home
  • employers buying an employee’s house
  • local authorities making compulsory purchases
  • property developers providing amenities to communities
  • companies transferring property to another company
  • charities buying for charitable purposes
  • right to buy properties
  • registered providers of social housing
  • Crown employees
  • property investment funds, for example Property Authorised Investment Funds (PAIFs) and Co-ownership Authorised Contractual Schemes (CoACSs)

You can also read guidance on freeport tax sites.

Exemptions

You do not have to pay SDLT or file a return if:

  • no money or other payment changes hands for a land or property transfer
  • property is left to you in a will
  • property is transferred because of divorce or dissolution of a civil partnership
  • you buy a freehold property for less than £40,000
  • you buy a new or assigned lease of 7 years or more, as long as the premium is less than £40,000 and the annual rent is less than £1,000
  • you buy a new or assigned lease of less than 7 years, as long as the amount you pay is less than the residential threshold or non-residential threshold of SDLT
  • you use alternative property financial arrangements, for example to comply with Sharia law, where the alternative financial provider pays SDLT when they buy the property under the arrangements

Read HMRC’s guidance on transactions that do not need a return.