UK Stamp Duty 2026: Rates, Thresholds & First-Time Buyer Relief Explained
Why stamp duty matters in 2026
Stamp Duty Land Tax (SDLT) is the single biggest closing cost most UK homebuyers face — for many it’s larger than the legal fees, survey and lender fees combined. The 2026 picture is shaped by two changes that took effect in late 2024 and early 2025: the higher-rate surcharge on additional dwellings rose from 3% to 5% on 31 October 2024, and the temporary thresholds that had been in place since 2022 reverted on 1 April 2025. Those revert thresholds are still in force throughout 2026, so the rules below are what you’ll actually pay if you complete a purchase this year.
SDLT applies to property purchases in England and Northern Ireland. Wales uses Land Transaction Tax (LTT) under the Welsh Revenue Authority; Scotland uses Land and Buildings Transaction Tax (LBTT) under Revenue Scotland. The rates, bands and reliefs are different in each — this guide covers SDLT only.
Standard residential rates for 2026
For a main residence purchase, SDLT is charged in slices. Each slice of the price is taxed at the rate for its band, and the total is the sum.
| Portion of the price | Rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001 – £250,000 | 2% |
| £250,001 – £925,000 | 5% |
| £925,001 – £1,500,000 | 10% |
| Above £1,500,000 | 12% |
Worked example for a £400,000 main-residence purchase:
- £0 on the first £125,000.
- 2% × £125,000 = £2,500 on the slice from £125,001 to £250,000.
- 5% × £150,000 = £7,500 on the slice from £250,001 to £400,000.
- Total: £10,000.
The effective rate on a £400,000 purchase is therefore 2.5%, even though the marginal rate at the top is 5%. That’s the slice-by-slice structure doing its work — you only pay the top rate on the pounds in the top band.
First-time buyer relief
First-time buyers get a more generous schedule, but only up to a purchase price of £500,000. Above that ceiling, the relief disappears entirely and the standard rates apply to the whole price.
| Portion of the price (FTB) | Rate |
|---|---|
| Up to £300,000 | 0% |
| £300,001 – £500,000 | 5% |
| Above £500,000 | No FTB relief — standard rates apply |
To qualify, every buyer named on the deed must be a first-time buyer, the property must cost £500,000 or less, and it must be intended as the buyer’s only or main residence. If even one buyer has previously owned (or part-owned) residential property anywhere in the world — including a property inherited — the relief is lost for the whole transaction.
A first-time buyer paying £450,000 owes £7,500 in SDLT: 0% on the first £300,000 and 5% on the remaining £150,000. The same buyer at £510,000 owes £15,500 under the standard rates, with no relief at all — a £60,000 jump in price triggers an £8,000 jump in tax. The £500,000 cliff is sharp enough that it materially affects what FTBs offer on properties priced around that mark.
The pre-April-2025 thresholds were more generous (£425,000 nil rate, £625,000 ceiling). Those are gone for 2026; budget on the current numbers.
Higher rates on additional dwellings
If you already own a residential property anywhere in the world and you’re buying another, the purchase is subject to the higher rate. The surcharge is 5 percentage points on every band, applied on top of the standard rates.
| Portion of the price (additional dwelling) | Rate |
|---|---|
| Up to £125,000 | 5% |
| £125,001 – £250,000 | 7% |
| £250,001 – £925,000 | 10% |
| £925,001 – £1,500,000 | 15% |
| Above £1,500,000 | 17% |
The classic case is a buy-to-let purchase. A £250,000 BTL costs £12,500 in SDLT (£6,250 at 5% + £6,250 at 7%) — five times what a main-residence purchase at the same price pays.
The surcharge also catches movers who haven’t completed the sale of their existing home before buying the next. The fix is the 36-month refund: if you sell your previous main residence within three years of completing on the new one, you can reclaim the surcharge. The standard-rate SDLT remains payable.
There are a handful of carve-outs from the higher rate — purchases under £40,000, caravans, houseboats, mobile homes, and certain mixed-use transactions — but for almost any conventional second purchase you’ll pay the surcharge unless you can use the 36-month refund.
Non-UK resident surcharge
A separate 2% surcharge applies on top of whichever rate schedule applies if the buyer is not UK-resident for SDLT purposes. The non-resident test runs over the 12 months ending on the day of completion: you need to have spent at least 183 days in the UK in that window to count as resident. The surcharge stacks on standard rates, FTB rates and the additional-dwellings rates — so a non-resident BTL investor pays standard + 5% + 2% = standard + 7 percentage points across every band.
The surcharge can be refunded if you become UK-resident within the 12 months immediately following completion. You apply to HMRC after the qualifying period.
Worked example: typical FTB purchase
Consider a single first-time buyer purchasing a £325,000 flat in England:
- The standard-rate calculation would be £6,250 — £2,500 at 2% (£125k–£250k slice) + £3,750 at 5% (£250k–£325k slice).
- Under FTB relief: £0 on the first £300,000 + 5% × £25,000 = £1,250.
- FTB relief saves this buyer £5,000.
Now consider the same buyer stretching to £520,000:
- FTB relief is lost because the price is above £500,000.
- Standard-rate calculation: £2,500 + 5% × £270,000 = £16,000.
- The same buyer at £500,000 exactly would pay £10,000 under FTB rules — so the marginal £20,000 of price comes with £6,000 of extra tax. Buyers near the cliff often negotiate hard to keep the price at or below £500,000.
Use the Stamp Duty Land Tax Calculator to model your own scenario, including the FTB and additional-dwelling rules.
When SDLT is due and how it’s paid
The SDLT return must be filed and the tax paid within 14 days of the effective date of the transaction — usually completion. Your conveyancer files the return through HMRC’s online portal and collects the SDLT from your closing funds; you don’t deal with HMRC directly. The 14-day window is tight, which is why solicitors hold cleared SDLT funds in their client account before completion.
Late filing triggers a £100 penalty (rising to £200 after three months) plus interest on the unpaid tax. Late payment attracts interest from day 15. These are rarely an issue when the conveyancer is handling things, but if the SDLT is wrong — for example, if the FTB relief is claimed when it shouldn’t be — HMRC has 4 years from the filing date to open an enquiry and demand additional tax plus interest and penalties.
Frequently asked questions
Does SDLT apply to gifts and inheritances? No SDLT is due on a property received by inheritance or as an outright gift with no consideration. But if you take over a mortgage on a gifted property — for example, parents transfer a property and the equity transferred is treated as consideration — SDLT may apply to the value of the debt assumed. Get specific advice if a transfer involves any payment, mortgage takeover or equity release.
Can I get FTB relief if my partner has owned before? No. Every buyer named on the title must be a first-time buyer. The relief is lost entirely if even one buyer has owned residential property anywhere in the world, including overseas property and inherited shares of property. This is why some couples buy in just one name to preserve relief — but doing so has knock-on effects on lender criteria, joint and several liability, and family law, so it’s a decision to take with proper advice.
What about shared-ownership properties? You can either pay SDLT on the value of the first share you’re buying (with possible top-ups later when you staircase), or make a “market value election” to pay SDLT on the full market value upfront. Each route has trade-offs; the upfront election can be cheaper if you intend to staircase to 100% within a few years.
Are there any 2026 changes coming? As of May 2026, no further SDLT band or rate changes have been announced for the 2026/27 tax year. Watch HMRC announcements around the Autumn Budget — historically that’s where SDLT changes are made, with implementation either immediately or from the following April.
How does SDLT interact with a mortgage? SDLT isn’t part of the mortgage and lenders won’t lend against it — you need it as cash on top of your deposit and fees. For a £325,000 FTB purchase with a 90% LTV mortgage, the cash needed is £32,500 deposit + £1,250 SDLT + ~£2,000 legal/survey costs ≈ £36,000 closing cash. Plan SDLT into the cash side of your purchase budget, not the mortgage side.
Authoritative sources: GOV.UK Stamp Duty Land Tax and the MoneyHelper SDLT guide for plain-English explanations of the bands and reliefs.