Stamp Duty Land Tax (SDLT) 2026/27

Residential SDLT Rates 2026/27

For residential properties purchased as a main residence, the SDLT rates for the 2026/27 tax year are: 0% on the portion up to £250,000, 5% on the portion from £250,001 to £925,000, 10% on the portion from £925,001 to £1.5 million, and 12% on any portion above £1.5 million. These rates apply to freehold and leasehold purchases alike. For example, if you buy a house for £500,000, SDLT is calculated as 0% on the first £250,000 (£0), and 5% on the remaining £250,000 (£12,500), giving a total SDLT bill of £12,500. The nil-rate band was temporarily increased from £125,000 to £250,000 in September 2022, and this change became permanent in the 2024 Autumn Budget. There is no SDLT on properties under £250,000 for most buyers. Leasehold purchases also require SDLT on the net present value of the ground rent, calculated separately at 1% on any amount above £150,000. First-time buyers benefit from a more generous nil-rate band, and additional surcharges apply to second homes, buy-to-let properties, and non-resident buyers.

First-Time Buyer Relief

First-time buyers purchasing their first home qualify for a special relief known as first-time buyer relief. Under the current rules, first-time buyers pay no SDLT on purchases up to £425,000 (previously £300,000 before the temporary increase). For properties costing between £425,001 and £625,000, SDLT is charged at 5% on the portion above £425,000, up to the £625,000 maximum threshold. Properties costing over £625,000 do not qualify for any first-time buyer relief, and standard SDLT rates apply on the full purchase price. To qualify as a first-time buyer, you must never have owned a property or land anywhere in the world — joint buyers must both meet this condition. The relief must be claimed on your SDLT return, which is usually submitted by your solicitor or conveyancer as part of the purchase process. If you later sell the property and buy another, you will not qualify for first-time buyer relief on the next purchase. The relief is designed to help younger buyers and those on lower incomes get onto the property ladder, potentially saving up to £11,250 compared to the standard SDLT bill on a £625,000 purchase.

Additional 5% Surcharge for Second Homes

An additional SDLT surcharge of 5% applies to purchases of additional residential properties, including buy-to-let investments and second homes. This surcharge is payable on top of the standard SDLT rates, meaning the effective rates are 5% on the first £250,000, 10% on the next portion up to £925,000, 15% from £925,001 to £1.5 million, and 17% above £1.5 million. The 5% surcharge applies to anyone who owns two or more residential properties at the end of the day of the transaction, subject to certain exceptions. If you are replacing your main residence, the surcharge does not apply, even if there is a temporary period where you own two properties. However, if you have not sold your previous main residence at the time of purchase, you may need to pay the surcharge upfront and claim a refund when the old property is sold (you must do this within 12 months of the sale). The surcharge also applies to purchases by companies, trusts, and partnerships, with certain exemptions for property developers and investors in the rental sector. The additional SDLT surcharge significantly increases the upfront cost of buying a second home or investment property, so it is important to factor it into your financial planning.

Non-Resident SDLT Surcharge

Non-UK resident purchasers face an additional 2% surcharge on top of the standard SDLT rates. This means a non-resident buying a residential property in England or Northern Ireland pays an extra 2% across all SDLT bands. When combined with the second home surcharge, a non-resident buying a second home faces a total surcharge of 7% on top of standard rates. The 2% non-resident surcharge applies to purchases of residential property where the buyer is not resident in the UK for tax purposes at the time of purchase. For individuals, this means being present in the UK for fewer than 183 days in the 12 months preceding the purchase. The surcharge was introduced in 2021 as part of measures to control foreign investment in UK property and to generate additional tax revenue. There are exceptions for Crown servants and certain diplomats. The surcharge applies to purchases of all residential property (not commercial), including freehold and leasehold interests. If you are a UK expatriate living abroad and purchasing a property in the UK, you will likely be subject to this surcharge unless you meet the residency condition.

SDLT Returns and Payment

SDLT must be reported and paid to HMRC within 14 days of completion (the date of legal completion, not exchange of contracts). The return is filed electronically by your solicitor or conveyancer through HMRC's online SDLT portal. Payment can be made by bank transfer, cheque, or direct debit. Late filing penalties start at £100 for returns up to 3 months late, rising to £200 for 3–12 months late, and then 5% of the tax due for returns over 12 months late. Interest also accrues on late payments at HMRC's late payment interest rate (currently 7.25% per annum). It is the buyer's responsibility to ensure the SDLT return is filed and the tax is paid on time, but in practice this is nearly always handled by the conveyancing solicitor as part of the purchase process. The SDLT return requires detailed information about the property, the purchase price, the buyer(s), and any reliefs or surcharges being claimed. Your solicitor should provide a copy of the SDLT return and receipt for your records.

SDLT for Leasehold Properties

SDLT on leasehold properties has two components: the purchase price (lease premium) and the annual ground rent. SDLT is charged on the lease premium at the same residential rates as freehold purchases. In addition, SDLT is charged on the Net Present Value (NPV) of the ground rent payable over the term of the lease. The rate on the NPV is 1% on any portion above £150,000 (the NPV threshold). This second charge can be significant for long leases with high ground rents. For example, if you buy a leasehold flat for £400,000 with ground rent of £500 per year on a 99-year lease, the NPV of the ground rent is calculated by HMRC's formula, and any amount above £150,000 is subject to 1% SDLT. First-time buyer relief does apply to leasehold purchases, covering both the premium and the ground rent element. If you purchase a lease extension or exercise the right to enfranchisement, SDLT may also be payable on the premium paid for the extension or freehold acquisition. Always check with your solicitor whether SDLT is payable on the ground rent element.

Multiple Dwellings Relief and Mixed-Use Property

Multiple Dwellings Relief (MDR) was substantially restricted from June 2024 and now only applies in very limited circumstances involving linked transactions of six or more dwellings. Previously, MDR allowed buyers to calculate SDLT based on the average price of each dwelling, reducing the overall tax bill. This relief is no longer available for standard property purchases. Mixed-use property (residential and commercial) attracts different SDLT treatment. For mixed-use purchases, the commercial SDLT rates apply, which do not include the 5% second home surcharge. Commercial SDLT rates are 0% up to £150,000, 2% from £150,001 to £250,000, and 5% above £250,000. Mixed-use property can include a shop with a flat above, a pub with accommodation, or land with agricultural and residential elements. If you are buying a mixed-use property, the commercial rates apply to the entire purchase price, which can be significantly cheaper than residential rates depending on the value.

SDLT Planning and Professional Advice

Given the complexity of SDLT rates, surcharges, and reliefs, professional advice is strongly recommended. A solicitor or conveyancer with SDLT expertise can ensure correct filing, identify applicable reliefs, advise on whether the second home surcharge applies, and help with first-time buyer relief claims. Incorrect SDLT returns can lead to penalties and interest charges. If you are buying a property with a spouse or partner, structuring the ownership carefully can affect SDLT liability, particularly where one party is a first-time buyer and the other is not. SDLT on property purchases made through a company, trust, or partnership has additional complexities, including the 15% higher rate for corporate purchases over £500,000. Always consult a qualified professional before completing any property transaction, especially where multiple properties, non-resident status, or mixed-use is involved. HMRC's SDLT manual provides detailed technical guidance on all aspects of SDLT, and the online SDLT calculator on the GOV.UK website can give you an initial estimate of your tax liability.

FAQs

What is the SDLT threshold for first-time buyers?

First-time buyers pay no SDLT on purchases up to £425,000. On purchases between £425,001 and £625,000, SDLT is charged at 5% on the portion above £425,000. Properties over £625,000 do not qualify for the relief.

Do I pay SDLT on a lease extension?

Yes, SDLT is payable on the premium paid for a lease extension if the premium exceeds the SDLT threshold. The rates depend on whether the property is residential or commercial.

Can I claim a refund of the second home surcharge?

Yes, if you pay the 5% surcharge on a new main residence before selling your old one, you can claim a refund if you sell the old property within 36 months (extended from 12 months for purchases after 2022).

Does SDLT apply to gifts of property?

If you transfer a property as a gift (no money changes hands), SDLT is not payable. However, if the gift involves the recipient taking over a mortgage, SDLT may be payable on the outstanding mortgage amount.

What are the SDLT rates for companies?

Companies buying residential property over £500,000 pay a flat 15% SDLT rate, plus the 2% non-resident surcharge if applicable. There are exemptions for property developers, lenders, and businesses providing residential accommodation.