Stamp Duty Land Tax (SDLT) is the tax payable in England when you buy property. Like the income tax system, it is applied to the purchase price in incremental value bands. The current rates if you only own one property are:
| Property purchase price | SDLT |
| Up to £125,000 | 0% |
| £125,001 to £250,000 | 2% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1.5m | 10% |
| The remaining portion above £1.5m | 12% |
So, if you were buying a home at £300,000, the SDLT calculation would be:
- Nothing to pay on the first £125,000
- 2% on the next £125,000 = £2,500
- 5% on the remaining £50,000 = £2,500
- Total due = £5,000
If you are buying a second home or investment that means you own more than one property, an additional 5% is applied to every band – including the first £125,000. So a second home owner would pay £20,000 in stamp duty for the same property.
First-time buyer relief
First-time buyers purchasing a home worth up to £500,000 can claim relief. The first £300,000 is free from SDLT; the remaining £200,000 is subject to 5% tax. If the property is worth more than £500,000, there is no relief and the standard rates are applied.
FTBs across most of the country are likely to be able to buy at below £300,000 so won’t need to budget for stamp duty. In the first half of this year, 60% of all FTBs in England paid no SDLT at all, rising to over 90% of those buying in the more affordable North of England.
However, if you live in a more expensive area, that might not be possible. For example, if you were a FTB in London buying at £475,000, you would pay:
- Nothing on the first £300,000
- 5% on the remaining £175,000 = £8,750
- (This is versus £13,750 that a non-FTB would have to pay.)
The North/South stamp duty divide
A report just released by Zoopla has revealed a significant split between the north and the south of England when it comes to stamp duty costs. Here are some of the headline statistics for the first half of 2026:
• In the North of England, fewer than 10% of FTBs paid SDLT.
• 51% of FTBs in the South East and almost 80% in London had to pay SDLT.
• In the North East, just under two-thirds of home movers pay SDLT, while across the rest of the country 80% pay it.
• In Yorkshire and the North West, the average stamp duty bill for home movers is £2,200.
• In the South East, 95% of movers pay SDLT, with an average bill of £11,250.
• In London, the average stamp duty cost is £20,000.
For those looking to buy in the more expensive parts of the country, stamp duty presents a significant cost that needs to be paid up front, in addition to the deposit, legal fees and other moving costs. So, the sooner you can begin planning for your move, the better.
Once you have an idea of the kind of property you’d like to buy and the rough value, you can work out the stamp duty bill. Add up all your buying costs and if things are tight, here are some suggestions:
• If you’re planning to take out a mortgage and you’re not at the limit of the maximum loan to value, speak to your broker to check out the viability of reducing your deposit by the amount of the stamp duty. Because your mortgage loan is likely to be spread over a number of years, borrowing a relatively small amount more may not make much difference to the interest rate or monthly payments.
• Delay buying to give yourself more time to save. Although prices and costs will rise over time, there’s unlikely to be much change over 6-12 months, over which period you might be able to save most if not all of the stamp duty amount.
• Consider buying a new build where the developer is offering to pay the stamp duty – this is quite a common incentive.
• See if the seller would agree to pay the stamp duty for you. Sometimes they will consider doing this if you are in a proceedable position that fits their timescale (handled via your legal representatives when the completion funds go through).
For first-time buyers trying to save for a deposit, the good news is that the government recently launched a consultation on the implementation of a new ISA product that will replace the Lifetime ISA. Evidence has shown that the LISA isn’t working well for many people, due to the complexity of its dual purpose and the withdrawal charge, so the new ISA is going to be a simpler product that better supports FTBs. The consultation closes on 18th August, and we expect the new product to be introduced in 2027.
It’s also worth noting that with Andy Burnham stepping into the role of Prime Minister, stamp duty could be changed in the future although he has ruled out changing it in the next Budget.
