How Stamp Duty Is Calculated in the UK
A plain-English guide to how stamp duty bands work in England, with worked examples at real price points and an explanation of first-time buyer relief.
Stamp duty is one of those costs that catches buyers off guard. You’ve saved for a deposit, got your mortgage offer, and then your solicitor mentions another four or five thousand pounds you’ll need on completion day. Understanding how the calculation actually works — before you make an offer — saves a nasty surprise later.
This guide covers SDLT in England and Northern Ireland. Scotland and Wales have their own systems (LBTT and LTT), which work differently.
It’s a progressive tax, not a flat rate
The most common misconception is that you pay one rate on the entire purchase price. You don’t. SDLT is calculated in bands, and each rate only applies to the portion of the price that falls within that band.
Think of it like income tax. You don’t pay 40% on your entire salary just because you earn above the higher-rate threshold. The same principle applies here.
The current standard residential 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 £1,500,000
- 12% on anything above £1,500,000
Worked example: £350,000
Let’s say you’re buying a semi-detached in Leeds for £350,000. It’s your only property.
| Band | Amount in band | Rate | Tax |
|---|---|---|---|
| Up to £125,000 | £125,000 | 0% | £0 |
| £125,001 – £250,000 | £125,000 | 2% | £2,500 |
| £250,001 – £350,000 | £100,000 | 5% | £5,000 |
| Total | £7,500 |
That’s an effective rate of about 2.1% — well below the 5% headline rate that applies to most of the price.
You can check any price instantly with our SDLT calculator.
First-time buyer relief changes the bands
If you’ve never owned a property before, the bands shift. You pay nothing on the first £300,000 and 5% on the portion from £300,001 to £500,000. The relief only applies if the total price is £500,000 or less.
On a £400,000 first home:
- 0% on £300,000 = £0
- 5% on £100,000 = £5,000
- Total: £5,000
Without relief, that same property would cost £10,000 in SDLT. The saving is substantial — but it vanishes entirely above £500,000. A first-time buyer at £550,000 pays standard rates on the full amount, with no relief at all.
Additional property surcharge
If the purchase means you’ll own more than one residential property, each band rate increases by 5 percentage points. There’s no nil-rate band for additional properties — you pay from the first pound.
Buying a £250,000 buy-to-let (when you already own your home):
- 5% on £125,000 = £6,250
- 7% on £125,000 = £8,750
- Total: £15,000
Compare that to £2,500 for the same price as your only home. The surcharge makes a huge difference, which is why timing your sale and purchase matters.
When is it due?
You must file an SDLT return and pay the tax within 14 days of completion. Your solicitor or conveyancer handles this in practice — it’s part of the completion statement they send you. If you’re buying without a solicitor (not recommended), you’d need to file directly with HMRC.
What this doesn’t cover
This guide covers standard residential purchases. Corporate buyers, shared ownership, linked transactions, and purchases of six or more properties in one go all have different rules. If your situation is unusual, speak to a solicitor or tax adviser rather than relying on a calculator alone.
For Scotland and Wales, the bands and rules differ — use our LBTT calculator or LTT calculator for those.