What Is Stamp Duty and When Do You Pay It?
Stamp Duty Land Tax (SDLT) is a tax charged on property purchases in England and Northern Ireland. Scotland has its own equivalent called Land and Buildings Transaction Tax (LBTT), while Wales levies Land Transaction Tax (LTT). Despite the different names, all three operate on the same progressive band principle: you pay a rising percentage only on the portion of the purchase price that falls within each band — not on the full price.
The tax is due within 14 days of the completion of your property purchase (for SDLT in England and Northern Ireland). Your conveyancer or solicitor normally submits the return and pays the tax on your behalf from the funds you provide at completion. In Scotland, the buyer has 30 days to submit an LBTT return; in Wales, LTT returns must be filed and paid within 30 days of the effective date of the transaction.
- Who pays: The buyer is always responsible for stamp duty, not the seller.
- What counts: Residential freehold and leasehold purchases, new-build properties, and shared ownership transactions all attract stamp duty.
- What is exempt: Certain transfers between spouses or civil partners, gifts (where no money changes hands), and property left in a will are generally exempt.
- Commercial property: Separate rate bands apply to non-residential and mixed-use property — this calculator covers residential only.
First-Time Buyer Stamp Duty Relief Explained
First-time buyers in England and Northern Ireland benefit from a significant SDLT relief if the property price is £625,000 or below. Under the 2025/26 rates, no SDLT is payable on the first £425,000, and only 5% is charged on the portion between £425,001 and £625,000. This means a first-time buyer purchasing at exactly £425,000 pays nothing, saving up to £8,750 compared with a standard purchaser.
If the purchase price exceeds £625,000, the relief is withdrawn entirely and standard rates apply to the full price from the first pound. There is no tapered withdrawal — it is a hard cliff edge, so buyers near the threshold should take specialist advice before committing to a price.
Scotland: LBTT First-Time Buyer Relief
Scotland offers a first-time buyer relief that raises the nil-rate threshold from £145,000 to £175,000. Above that, the standard LBTT bands continue to apply. The maximum saving versus a standard purchaser is £600 (the 2% LBTT that would otherwise be due on £30,000). Unlike England, Scotland imposes no upper price limit on first-time buyer relief.
Wales: No Separate First-Time Buyer Relief
Wales does not operate a dedicated first-time buyer LTT relief. All residential purchases — whether first-time or not — use the same standard LTT bands. The Welsh Government has kept the nil-rate threshold at £225,000, which does provide a de-facto benefit for buyers of lower-priced homes.
Stamp Duty for Additional Properties and Buy-to-Let
Buyers who already own a residential property and are purchasing an additional home — including buy-to-let investments, second homes, and holiday lets — pay a surcharge on top of the standard rate bands.
- England & Northern Ireland (SDLT): A 3% surcharge is added to every band. A property bought at £300,000 attracts an extra £9,000 on top of the standard SDLT liability.
- Scotland (LBTT): An Additional Dwelling Supplement (ADS) of 6% is charged on the full purchase price — not just the amount above a threshold — making Scotland's surcharge particularly significant on lower-value properties.
- Wales (LTT): A 4% surcharge is added to each band for higher rates transactions, affecting additional dwellings and some corporate purchases.
Limited Company Purchases
When a limited company buys a residential property it is treated as an additional dwelling transaction in England and Northern Ireland, attracting the 3% SDLT surcharge regardless of whether the company already owns property. In Scotland, the ADS of 6% applies. In Wales, the higher LTT rates (standard plus 4% surcharge) apply. Corporate buyers should also consider the Annual Tax on Enveloped Dwellings (ATED) for high-value properties held within a company structure. These rules are complex and specialist tax advice is strongly recommended before acquiring residential property through a company.
