Part 1: How stamp duty works and what you could pay
Stamp duty explained simply: it is a tax you may need to pay when buying a property or land. Alongside your deposit and other buying costs, it can be one of your biggest upfront expenses, so understanding it early helps you work out what you can realistically afford.
Whether you’re buying your first flat, moving to a larger home or purchasing another property, the amount depends on the price and your circumstances.
This guide explains Stamp Duty Land Tax, known as SDLT, which applies in England and Northern Ireland. Scotland and Wales have their own property taxes, with different rates and rules.
For the official rules and information about reliefs and surcharges, visit HMRC’s Stamp Duty Land Tax guidance.
What is stamp duty?
Stamp duty is a tax that can apply when you buy property or land. The buyer is responsible for paying it.
For residential purchases, your bill depends on the purchase price, whether you qualify for first-time buyer relief and whether the higher rates for additional properties apply.
It is calculated in bands. You pay the relevant percentage on each portion of the price, rather than applying one rate to the whole purchase.
What are the standard stamp duty rates?
| Portion of the purchase price | Rate |
|---|---|
| Up to £125,000 | 0% |
| Above £125,000 to £250,000 | 2% |
| Above £250,000 to £925,000 | 5% |
| Above £925,000 to £1.5 million | 10% |
| Above £1.5 million | 12% |
These generally apply where you are purchasing your only residential property or replacing your main residence, subject to the relevant conditions.
Example: buying a £400,000 home
Assuming the standard rates apply, the calculation is:
Nothing on the first £125,000.
£2,500 on the next £125,000, charged at 2%.
£7,500 on the remaining £150,000, charged at 5%.
Your total stamp duty bill would be £10,000.
That money needs to be available alongside your deposit and other buying costs. If you have £50,000 saved, you cannot assume the full amount can go towards the deposit unless you have separate funds for everything else.
How much stamp duty do first-time buyers pay?
Qualifying first-time buyers purchasing a home for £500,000 or less pay:
No stamp duty on the first £300,000.
5% on the portion above £300,000.
For example, a qualifying first-time buyer purchasing at £400,000 would pay £5,000. At £450,000, the bill would be £7,500.
If the purchase price exceeds £500,000, first-time buyer relief is lost entirely. The standard residential bands then apply, assuming no additional surcharge is due.
This creates an important jump. A qualifying £500,000 purchase attracts £10,000 in stamp duty, while a £510,000 purchase attracts £15,500 at standard rates.
What if you’re buying with someone who has owned before?
Every purchaser must qualify for first-time buyer relief.
If you have never owned a home but your partner has, you cannot claim the relief on a joint purchase simply because you are personally a first-time buyer.
Previous ownership overseas can also affect eligibility. Tell your solicitor about both buyers’ property histories before relying on a particular figure.
For help understanding your deposit, borrowing and overall budget, explore my first-time buyer mortgage advice.
Do new builds qualify for an exemption?
There is no general stamp duty exemption simply because a property is newly built.
The usual rules still apply, including first-time buyer relief where available. If a developer offers to contribute towards stamp duty or other costs, make sure your solicitor and mortgage adviser know about the incentive.
Part 2: Moving home, additional properties and paying the bill
Do you pay stamp duty when moving home?
Usually, yes, where the new purchase exceeds the relevant threshold. Selling one home and buying another does not remove the ordinary stamp duty bill.
Your mortgage arrangements are a separate consideration. You might be able to transfer your existing mortgage product to the new property, known as porting, but this does not create a stamp duty exemption.
My mortgage advice for home movers explains how I can help you compare your borrowing options when planning a move.
What if you buy before selling?
If your new purchase completes while you still own your previous main home, you may need to pay the higher rates for additional properties.
These are five percentage points above the standard residential rates.
For example, a £300,000 purchase subject to the higher rates attracts £20,000 in stamp duty, compared with £5,000 at standard rates.
This can create a substantial temporary funding requirement, even where you intend to sell your old home shortly afterwards.
Can you claim a stamp duty refund?
If you sell or give away your previous main residence within three years of buying the new one, you may qualify for a refund of the higher-rate element.
The other conditions must also be met. Selling a property does not automatically qualify you for a refund if the higher rates still apply for another reason.
For current sales, the claim generally needs to be made within 12 months of selling the previous main home or the filing date of the new home’s SDLT return, whichever is later.
Your solicitor should confirm your eligibility and deadline.
What about second homes and buy-to-let purchases?
The higher rates commonly apply when buying an additional residential property, including a second home or buy-to-let.
Property owned overseas can count, while joint ownership and a spouse’s property interests may affect the position.
Companies and non-UK resident buyers can face additional rules. Get the calculation checked before committing to the purchase.
When does stamp duty need to be paid?
The return and any tax due normally need to reach HMRC within 14 days of the transaction’s effective date, usually completion.
Your solicitor or conveyancer will normally handle this and ask you to provide the money beforehand.
Exchange of contracts is not usually the trigger, although an earlier effective date can arise in some circumstances. Late filing or payment can lead to penalties and interest.
Can you add stamp duty to your mortgage?
You cannot assume a lender will simply add the tax bill to your mortgage.
However, borrowing more and using a smaller deposit may leave some savings available for buying costs. This depends on affordability, loan-to-value limits and the lender’s criteria.
A larger mortgage increases the borrowing and interest payable, and may affect the rate available.
Do you pay stamp duty when remortgaging?
An ordinary remortgage without a change in ownership does not normally trigger SDLT.
If ownership changes and someone pays money or takes responsibility for mortgage debt, the position can be different.
If you’re reviewing your existing borrowing, my remortgaging advice explains the support available.
Budget for more than the deposit
Allow for legal fees, surveys, mortgage fees, removals and a financial buffer alongside stamp duty. For a useful breakdown, read MoneyHelper’s guide to buying and moving costs.
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Based in Romford, I provide whole-of-market mortgage advice to buyers across Essex and throughout the UK, with clear, personal guidance from your first enquiry through to completion. I provide mortgage advice through Clarity Wealth Management LLP, which is authorised and regulated by the Financial Conduct Authority. FCA registration number: 575252.
- Information checked on 18 October 2026. Tax rules can change. This is general information, not personalised tax advice. Your solicitor or tax adviser should confirm your liability.
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