Stamp duty is often the biggest single cost of buying a home after the deposit itself. Understanding how it works can help you budget with confidence.
If you are buying a property in England or Northern Ireland, stamp duty is one of the first costs you need to factor into your plans. The rules changed significantly in October 2024 and again in April 2025, and many buyers are uncertain about what they will actually pay, particularly first-time buyers, those purchasing a second home, or anyone who has not moved for a while.
This guide explains the current stamp duty rates, who qualifies for relief, how the additional dwelling surcharge works, and how the cost is paid as part of your conveyancing. If you’d prefer to talk it through with someone, our Residential Property Solicitors are happy to walk you through your specific situation.
What is Stamp Duty and When Do You Pay It?
Stamp Duty Land Tax (SDLT) is a tax paid to HMRC when you buy a residential property in England or Northern Ireland. Scotland and Wales operate their own equivalents and Land and Buildings Transaction Tax and Land Transaction Tax respectively.
You generally pay stamp duty if you:
- Buy a freehold property
- Buy a new or existing leasehold
- Buy a property through a shared ownership scheme
- Are transferred land or property in exchange for payment (for example, taking on a mortgage or buying a share in a house)
Stamp duty is due within 14 days of completion. Your conveyancing solicitor will normally handle this on your behalf, sending the SDLT return to HMRC and transferring the funds from your completion monies.
For a full walkthrough of what to expect on the day itself, see our guide to completion day.
Stamp Duty Rates UK: Current Thresholds for 2025/2026
The standard residential stamp duty rates that apply from 1 April 2025 are:
- Up to £125,000 – 0%
- £125,001 to £250,000 – 2%
- £250,001 to £925,000 – 5%
- £925,001 to £1.5 million – 10%
- Above £1.5 million – 12%
Stamp duty is calculated in bands. You only pay the higher rate on the portion of the price that falls into each band, not on the whole purchase price.
For example, on a property at £350,000, a non-first-time buyer pays nothing on the first £125,000, 2% on the next £125,000 (£2,500), and 5% on the remaining £100,000 (£5,000); a total of £7,500.
Do First Time Buyers Pay Stamp Duty?
First-time buyers in England and Northern Ireland still benefit from a higher tax-free threshold, although the relief is less generous than it was before April 2025.
If you are a first-time buyer:
- You pay no stamp duty on properties up to £300,000
- You pay 5% on the portion between £300,001 and £500,000
- If the property costs more than £500,000, the standard rates apply with no first-time buyer relief
To qualify, all buyers must be first-time buyers, meaning none of you has ever owned, or had an interest in, a residential property anywhere in the world. This includes any previous ownership through inheritance, gift, or joint purchase, not just properties bought outright. The property must also be your only or main home, and you must intend to occupy it as such.
You can find more on what’s involved in your purchase on our dedicated first-time buyers hub, which walks through the process from offer to completion.
Stamp Duty on Second Homes and Buy-to-Let Properties
If you are buying an additional residential property, whether a second home, a holiday home or a buy-to-let, you will usually pay an extra surcharge on top of the standard rates. The surcharge currently sits at 5% and applies if, at the end of the day of completion, you own two or more residential properties anywhere in the world. It does not apply to purchases under £40,000, although those properties still count as additional dwellings for any future transactions.
There are exceptions. If you are replacing your main residence, selling your old home and buying a new one, the surcharge does not apply. If you have not yet sold your previous home but do so within 36 months, you can usually claim a refund.
The surcharge can add a substantial amount to your bill. On a £400,000 second home, for example, the additional 5% adds £20,000 on top of the standard stamp duty.
Stamp Duty on New Builds and Shared Ownership
Buying a new build does not change your stamp duty position and the same rates apply as on any other property.
For shared ownership purchases, you have two options:
- Pay stamp duty on the full market value at the start (a “market value election”), which means you pay no further SDLT if you staircase later.
- Pay stamp duty only on the share you are buying initially, with potential further charges as you increase your share.
Each option has different long-term cost implications. Your conveyancing solicitor will explain which is likely to work better for your circumstances and budget.
We go into more detail about the legal side of shared ownership purchases and buying a new build property on our dedicated hubs.
How Your Conveyancing Solicitor Handles the Stamp Duty Payment
You do not usually need to deal with HMRC directly. As part of the conveyancing process, your solicitor will:
- Confirm the correct stamp duty figure based on your purchase price and circumstances
- Apply for any reliefs you are entitled to, such as first-time buyer relief
- Hold the stamp duty amount in their client account ready for completion
- Submit the SDLT return to HMRC and pay the tax within the 14-day deadline
- Provide HMRC’s confirmation, which is needed before your purchase can be registered at the Land Registry
Getting these right matters as mistakes on stamp duty returns can lead to penalties, and missed reliefs can leave you out of pocket by thousands of pounds.
Other Costs to Budget For
Stamp duty is one cost among several when buying a property. Alongside your deposit, remember to budget for:
- Conveyancing fees and search costs
- Mortgage arrangement and valuation fees
- A surveyor’s report
- Removals and any immediate work to the property
Knowing all of your costs upfront makes the buying process much less stressful. For a clear breakdown of what to expect, take a look at our guide to conveyancing costs, which sets out our fees and the typical disbursements involved.
The Hidden Cost of Getting Stamp Duty Wrong
Stamp duty mistakes are expensive and often irreversible once completion has passed. Miscalculating the surcharge, missing out on first-time buyer relief, or misjudging mixed-use rules can cost thousands, and HMRC penalties on top if a return is wrong or late.
Experienced property solicitors spot these issues before they become problems, make sure you claim every relief you’re entitled to, and handle the SDLT return correctly as part of your conveyancing. A recent example of this in practice is our client success story where expert conveyancing advice saved a buyer over £5,800 on an auction purchase.
It’s a small cost for real peace of mind on what is likely your biggest purchase. Stamp duty is just one of the things that can catch buyers out, and we cover others in our article on the 10 red flags to be aware of when buying a property.
Talk to Our Residential Property Solicitors
Whether you’re buying a second home, navigating a mixed-use purchase, or working through shared ownership, the right legal advice early on can save you thousands and spare you nasty surprises at completion.
At Barker Booth & Eastwood, our experienced team make conveyancing straightforward. You’ll have one dedicated solicitor handling your transaction from start to finish, regular updates at every stage, and a friendly team who keep things moving, without the jargon or the runaround.
Ready to move forward with your house purchase with confidence? Speak to our Residential Property Solicitors by calling us on 01253 362 500 or requesting an instant conveyancing quote online.
Disclaimer: The content of this website blog is for general awareness and insight. This is not legal or professional advice and readers should not act upon the information provided, they should seek professional advice based on their own particular circumstances. The law may have changed since this article was published.
FAQs
Do first-time buyers pay stamp duty in 2026?
Only on the portion of the purchase price above £300,000, and only if the property costs less than £500,000. Above £500,000, full standard rates apply.
How much stamp duty will I pay on a £300,000 house?
A non-first-time buyer pays £5,000 (£0 on the first £125,000, 2% on the next £125,000, and 5% on the final £50,000). A first-time buyer pays nothing.
Is stamp duty paid before or after completion?
Stamp duty is paid after completion. Your solicitor must submit the return and pay the tax within 14 days.
Can I add stamp duty to my mortgage?
Stamp duty is paid in cash on completion and cannot generally be added to your mortgage. You will need the funds available alongside your deposit and other costs.
