Understanding Stamp Duty in the UK: What it Is and How Much You’ll Pay

If you’re buying a property in the UK, one of the biggest extra costs to factor in is Stamp Duty Land Tax (SDLT). For many homebuyers, it can feel confusing or even like a hidden fee, so let’s break it down simply — what stamp duty actually is, how it’s calculated, and the different thresholds you’ll need to know about.

What is Stamp Duty?

Stamp Duty Land Tax (often just called stamp duty) is a government tax you pay when buying property or land above a certain value in England and Northern Ireland.

• It’s calculated as a percentage of the purchase price, and the rate depends on how much the property costs and whether you already own another property.

• Scotland and Wales have their own versions: Land and Buildings Transaction Tax (LBTT) in Scotland and Land Transaction Tax (LTT) in Wales.

Stamp duty is paid to HMRC within 14 days of completion, usually handled by your solicitor or conveyancer.

Current Stamp Duty Rates (2025)

For residential property purchases in England and Northern Ireland, the following stamp duty bands apply:

• Up to £250,000 – 0%

• £250,001 – £925,000 – 5%

• £925,001 – £1.5 million – 10%

• Over £1.5 million – 12%

This means you don’t pay one flat rate on the whole price — it’s a tiered system, a bit like income tax.

Example:

If you buy a house for £300,000:

• You pay 0% on the first £250,000

• You pay 5% on the remaining £50,000 = £2,500

Total Stamp Duty: £2,500

First-Time Buyers Relief

If you’re a first-time buyer, you benefit from special rules:

• Up to £425,000 – 0%

• £425,001 – £625,000 – 5%

If the property costs more than £625,000, the standard rates apply.

Additional Properties and Buy-to-Let

If you already own a home and you’re buying another (such as a buy-to-let or second home), you’ll pay an extra 3% surcharge on top of the standard rates.

Why Does Stamp Duty Exist?

Stamp duty has been around for centuries — originally charged on physical “stamps” used to validate documents. Today, it’s simply a way for the government to raise revenue, especially from the property market.

For buyers, it’s important to see stamp duty as part of the overall cost of moving, alongside deposits, legal fees, and mortgage costs.

Final Thoughts

Stamp duty can feel like a frustrating extra expense, but understanding the rules means there are no surprises on completion day. Always budget for it early on and speak with your solicitor or mortgage advisor so you know exactly what you’ll owe.