Stamp Duty Land Tax (SDLT) is a progressive tax charged on the purchase price of a residential property in England and Northern Ireland. It is paid by the buyer, and it is banded: you pay a rate on each portion of the price that falls inside a band, not a single flat rate on the whole price. This marginal structure is the single most important thing to understand, because it means the rate on the top slice of the price is far higher than the average rate across 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, which is why the itemized breakdown matters.
Current standard residential bands
The standard residential rates apply to a single home bought by someone who already owns a property. The bands are:
- 0% on the first £125,000
- 2% on the portion from £125,001 to £250,000
- 5% on the portion from £250,001 to £925,000
- 10% on the portion from £925,001 to £1.5 million
- 12% on everything above £1.5 million
Only the money above each threshold is taxed at the higher rate. A £400,000 purchase pays 0% on the first £125,000, 2% on the next £125,000, and 5% on the remaining £150,000, for a total of £10,000.
First-Time Buyer Relief
First-time buyers — people who have never owned a property anywhere in the world — qualify for relief that raises the zero-rate band. Under the relief, the first £300,000 is tax-free and the portion from £300,001 to £500,000 is taxed at 5%. A £300,000 first home therefore owes £0.
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.
The 5% additional property surcharge
Buyers of additional residential properties — a second home, a buy-to-let, or any property beyond their main residence — pay a flat 5% surcharge on top of every standard band. The surcharge shifts the bands to 5%, 7%, 10%, 15%, and 17%. It applies to the full purchase price, band by band, so it is a significant cost on any additional purchase. A £300,000 primary home owes £5,000, while the same £300,000 as an additional property owes £20,000.
How to use this calculator
Enter the property purchase price and select your buyer status. The calculator instantly shows the total SDLT due, the effective tax rate, and an itemized marginal breakdown listing each band, its rate, the taxable portion, and the tax per band. Results are illustrative and not tax advice — always confirm the current rates with a licensed conveyancer or tax adviser before completing a purchase.