How Stamp Duty Is Calculated

Stamp Duty, or Stamp Duty Land Tax (SDLT) as it is formally known, is a tax that applies to property purchases in the UK.

Please note that this guide pertains specifically to England & Northern Ireland; for information related to Wales & Scotland, it’s advisable to seek advice within those regions.

What is Stamp Duty?

Stamp Duty Land Tax (SDLT) is a tax paid when purchasing property or land in England and Northern Ireland. It applies to both residential and commercial properties above a certain price threshold. The tax is paid to His Majesty’s Revenue and Customs (HMRC) and must be settled within 14 days of completing the property purchase.

Stamp Duty is charged in bands, meaning you only pay the tax on the portion of the property price that falls within each band. The amount payable depends on whether you are a first-time buyer, a homeowner, or purchasing an additional property.

Below is a breakdown of basic rate Stamp Duty (for standard property purchases) and additional rate Stamp Duty (for buying a second home or investment property):

Written in August 2023 by:

Sam Chester

Stamp Duty Rates for
First or Next Main Residence

For first or next homes, stamp duty is calculated at the lower rate. This is also referred to as ‘basic rate’ stamp duty.

0% on the first £125,000 of the purchase price.
2% on the portion between £125,001 and £250,000.
5% on the portion between £250,001 and £925,000.
10% on the portion between £925,001 and £1.5 million.
12% on the portion above £1.5 million.

Stamp Duty Rates for Additional Property Purchases or Second Homes

For additional property purchases, Buy to Let or second homes, the Stamp Duty rate is higher and calculated as follows:

5% on the first £125,000 of the purchase price.
7% on the portion between £125,001 and £250,000.
10% on the portion between £250,001 and £925,000.
15% on the portion between £925,001 and £1.5 million.
17% on the portion above £1.5 million.

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Attention Please!!!

The content within this article is as accurate as the date it was written. To ensure the most up to date information, you should consult with one of the experts that we work with as every lender and their polices are different and can be changed or amended without notice.

This website is for information only and does not constitute financial advice. Our mortgage advisers are all fully qualified to provide mortgage advice in accordance with the Financial Conduct Authority (FCA) regulations. We only exclusively operate with businesses that are authorised and regulated by the FCA. All advice offered will be unique to your individual circumstances.

Some Buy to Let mortgages are not regulated by the FCA. You should carefully consider securing other debts against your home. If you do not keep up your mortgage repayments, your home may be repossessed. Equity released from your home will also be secured against it.