Stamp Duty Guide 2026: What You Need to Know Before Buying a Property

If you’re buying a house, you need to factor the cost of stamp duty into your budget. Stamp duty can seem confusing, but this guide will help you understand when you have to pay stamp duty and how much it will be.

What is stamp duty?

Stamp Duty Land Tax (SDLT) is a one-off tax paid by the buyer of residential property in England and Northern Ireland. Stamp duty rates are tiered, so you pay different rates on each portion of the property price – similar to how income tax works. Scotland has its own equivalent called Land and Buildings Transaction Tax (LBTT), and Wales uses Land Transaction Tax (LTT), both with different rates and thresholds.

There is tax relief for first-time buyers, surcharges that apply to overseas buyers, and higher rates for those buying an additional or buy-to-let property.

What changed in April 2025?

On 1 April 2025, the temporary stamp duty relief introduced in September 2022 came to an end, and SDLT thresholds reverted to their previous levels. The key changes were:

• The nil-rate band for standard buyers dropped from £250,000 back to £125,000, meaning more buyers now pay stamp duty.
• The first-time buyer nil-rate threshold fell from £425,000 to £300,000, and the maximum property value eligible for first-time buyer relief reduced from £625,000 to £500,000.
• The surcharge for additional properties (second homes, buy-to-let) increased from 3% to 5%, having already taken effect from 31 October 2024.

No further changes have been announced for 2026, so the rates below remain in effect.

Stamp duty tax bands – standard rates

The current rate bands for residential property purchased as your main residence in England and Northern Ireland are:

How much will I pay? – Worked example

Stamp duty is calculated based on the part of the property purchase price falling within each band. For example, if you buy a house or flat with a purchase price of £450,000 as your main residence, you would pay:

• 0% on the first £125,000 = £0
• 2% on the next £125,000 (£125,001 – £250,000) = £2,500
• 5% on the remaining £200,000 (£250,001 – £450,000) = £10,000
• Total SDLT = £12,500

First-time buyers and stamp duty

First-time buyers in England and Northern Ireland benefit from stamp duty relief. The current thresholds (from 1 April 2025) are:

• 0% on the first £300,000
• 5% on the portion between £300,001 and £500,000

If the purchase price exceeds £500,000, first-time buyer relief is not available and you will pay stamp duty at the standard rates on the full purchase price.

Example: A first-time buyer purchasing a property for £400,000 would pay:

• 0% on the first £300,000 = £0
• 5% on the remaining £100,000 = £5,000
• Total SDLT = £5,000

To qualify as a first-time buyer, you must never have owned or inherited a residential property, either in the UK or abroad. If you have previously owned or inherited part of a property, you will not be considered a first-time buyer.

First-time buyers purchasing a buy-to-let property are not entitled to first-time buyer relief and must pay stamp duty at the standard rates.

Higher rates for additional properties

If you are buying an additional property – such as a second home, holiday home, or buy-to-let investment – you will pay a 5% surcharge on top of the standard stamp duty rates. This surcharge increased from 3% to 5% on 31 October 2024.

The additional property rates for 2026 are:

You will not pay the additional 5% surcharge if the property you are buying replaces your main residence. If there is a delay in selling your current home, so that it has not been sold by the day you complete on your new property, you will initially have to pay the higher rate. However, you can apply for a refund if you sell your previous main home within 36 months of completing the new purchase.

Surcharge for overseas buyers

Non-UK residents must pay a 2% surcharge on top of the standard stamp duty rates. To be classed as a non-UK resident for SDLT purposes, you must not have been present in the UK for at least 183 days in the 12 months before your purchase.

The overseas surcharge applies in addition to other surcharges. For example, an overseas buyer purchasing a buy-to-let property would pay the standard rates plus the 5% additional property surcharge plus the 2% non-resident surcharge – a combined surcharge of 7% on top of the standard bands.

Companies buying residential property

Companies and other non-natural persons (such as trusts) purchasing residential property valued above £500,000 pay a flat rate of 17% SDLT on the entire purchase price. This rate was increased from 15% on 31 October 2024. Properties purchased for under £500,000 by companies are subject to the additional property surcharge rates instead.

When and how to pay

You have 14 days from the date of completion to file your SDLT return and pay any stamp duty owed to HMRC. In practice, your solicitor or conveyancer will usually handle the stamp duty return and payment on your behalf, but you remain legally responsible for ensuring it is submitted and paid on time. HMRC may charge penalties and interest if the return is filed late.

Other stamp duty exemptions and reliefs

In addition to first-time buyer relief, there are several other circumstances where you may pay less or no stamp duty:

• Transfers due to divorce or dissolution of a civil partnership: No SDLT is payable when property is transferred between spouses or civil partners as part of a divorce or dissolution agreement.
• Property left in a will: Inherited property is exempt from SDLT. However, if you later purchase a new property while still owning the inherited one, the additional property surcharge may apply.
• Properties under £40,000: No SDLT is due on any property purchased for less than £40,000.
• Shared ownership: Shared ownership buyers may be able to choose whether to pay SDLT on the full market value or on the share they are purchasing. Different rules apply depending on the scheme.
• Multiple dwellings relief: Note that Multiple Dwellings Relief was abolished from 1 June 2024, so this is no longer available for purchases completing after that date.

Tips for budgeting for stamp duty

Stamp duty can represent a significant upfront cost on top of your deposit, legal fees, and moving expenses. Here are some practical tips:

• Calculate early: Use the HMRC stamp duty calculator at gov.uk to get an accurate figure for your circumstances before making an offer.
• Don’t forget the extras: Budget for solicitor fees, survey costs, and removal expenses alongside your stamp duty bill.
• Check your buyer status: Confirm whether you qualify as a first-time buyer, as this could save you thousands of pounds.
• Plan your sale timing: If you’re selling one property and buying another, try to align completion dates to avoid temporarily paying the additional property surcharge.
• Get professional advice: If you’re buying through a company, purchasing jointly, or your situation is complex, a solicitor or tax adviser can help you understand your SDLT liability.

Get in touch

If you’re thinking of buying property in Tooting, Balham, Clapham or Streatham, contact us today for more advice about stamp duty and other aspects of finding your new home.