UK Stamp Duty Land Tax (SDLT): How Residential SDLT Is Calculated

What Is Stamp Duty Land Tax?

Stamp Duty Land Tax (SDLT) is a tax on the purchase of land and buildings in England and Northern Ireland. It is charged on the price you pay for a residential property and is payable by the buyer, not the seller. The tax is progressive: you pay a rate on each portion of the price that falls within a band, not a single rate on the whole price. This banded structure is the single most important thing to understand, because it means the marginal rate on the top slice of the price is far higher than the average rate on the whole purchase.

Progressive Marginal vs Flat-Rate Taxation

A flat-rate tax charges one percentage on the entire price. A progressive marginal tax charges a different rate on each slice of the price as it crosses a threshold. SDLT is progressive. On a £350,000 home, the first £125,000 is free, the next £125,000 is taxed at 2%, and the final £100,000 is taxed at 5%. The result is £7,500 of tax — an effective rate of about 2.14% — even though the top marginal band is 5%. The effective rate is always lower than the highest marginal rate you cross.

The Residential SDLT Bands

The standard residential rates apply to a single home bought by someone who already owns a property:

Purchase price portion	SDLT rate
Up to £125,000	0%
£125,001 to £250,000	2%
£250,001 to £925,000	5%
£925,001 to £1.5 million	10%
Above £1.5 million	12%

Because the tax is banded, only the money above each threshold is taxed at the higher rate. A property priced at £350,000 does not pay 5% on the whole £350,000. It pays 0% on the first £125,000, 2% on the next £125,000, and 5% on the remaining £100,000, for a total of £7,500.

Worked Example

A buyer purchases a home for £400,000.

• 0% on the first £125,000 = £0
• 2% on the next £125,000 (£125,001 to £250,000) = £2,500
• 5% on the next £150,000 (£250,001 to £400,000) = £7,500
• Total SDLT = £10,000

First-Time Buyer Relief

First-time buyers who purchase their first home, and who have never owned a property anywhere in the world, qualify for reduced rates. The relief raises the zero-rate band and lowers the rate on the next slice:

Purchase price portion	SDLT rate
Up to £300,000	0%
£300,001 to £500,000	5%
Above £500,000	Standard rates apply

The £500,000 Cap

The relief has a hard cap: it only applies to properties priced at or below £500,000. If the purchase price is above £500,000, the relief is disqualified entirely and standard residential rates apply to the whole price — not just the portion above £500,000. A first-time buyer purchasing at £600,000 pays standard rates on the entire amount.

Additional Property Surcharge

Buyers of additional residential properties, such as a second home or a buy-to-let, pay a 5% surcharge on top of the standard rate at every band. The surcharge shifts the bands to 5%, 7%, 10%, 15%, and 17%. It applies to the whole price, band by band, so a £400,000 second home attracts 5% on the entire purchase price in addition to the standard banded tax.

• Standard banded tax on £400,000 = £10,000
• 5% additional-property surcharge on £400,000 = £20,000
• Total SDLT = £30,000

When Is SDLT Paid?

SDLT must be paid to HMRC within 14 days of the completion date of the property purchase. Your conveyancer or solicitor usually handles the payment and the SDLT return as part of the transaction. Failing to pay on time can attract interest and penalties, so it is important to budget for the tax before completion.

Important Caveats

Rates Change

SDLT rates and thresholds have changed repeatedly in recent years, and they are set by the government in the Budget. The bands in this guide reflect the current statutory rates. Before relying on a figure, confirm the current thresholds, because a change in the zero-rate band can move the tax on a given price by thousands of pounds.

Scotland and Wales Differ

SDLT applies only in England and Northern Ireland. Scotland uses Land and Buildings Transaction Tax (LBTT) and Wales uses Land Transaction Tax (LTT), each with its own bands and rates.

Finance Information Disclaimer

This guide is provided for general informational and educational purposes only. It is not financial, investment, legal, or tax advice. SDLT rates, thresholds, and reliefs change and vary by jurisdiction and individual circumstances. Always consult a licensed conveyancer, tax adviser, or your solicitor before completing a property purchase.

Calculate Your Own Stamp Duty

Ready to see the SDLT on a specific purchase? Use our live UK stamp duty calculator to enter the purchase price and your buyer status, and view the tax due along with the itemized marginal breakdown.

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