Guide · 8 min read
Stamp duty, explained.
Three nations, three taxes, three different sets of rules. Here's how it actually works — and the corners where buyers most often misread the bill.
It's a tax, but not the tax you think
The first thing to understand: "stamp duty" isn't one tax. It's a colloquial label for three legally separate taxes administered by three different bodies.
- England & Northern Ireland — Stamp Duty Land Tax (SDLT), administered by HMRC.
- Scotland — Land and Buildings Transaction Tax (LBTT), administered by Revenue Scotland since April 2015.
- Wales — Land Transaction Tax (LTT), administered by the Welsh Revenue Authority since April 2018.
The rates differ. The thresholds differ. The reliefs differ. A property in Cardiff and a property in Bristol at the same price can attract very different bills.
How banded ("marginal") rates work
All three taxes use a banded structure. You don't pay the headline rate on the entire purchase price — you pay each rate only on the slice of price that falls within its band.
This trips people up constantly. If you see "5% above £250,000" on an English property of £300,000, you do not pay 5% of £300,000. You pay 0% on the first £250,000 and 5% only on the £50,000 above it. Total bill: £2,500.
England (SDLT) bands
Standard residential rates from 1 April 2025:
| Portion of price | Rate |
|---|---|
| Up to £250,000 | 0% |
| £250,001 – £925,000 | 5% |
| £925,001 – £1,500,000 | 10% |
| Over £1,500,000 | 12% |
First-time buyer relief (England)
If you and any joint buyer have never owned a residential property anywhere in the world, the nil-rate band rises to £425,000, and 5% then applies between £425k and £625k. Crucially, the relief disappears entirely above £625,000. Buy a first home for £625,001 and you're back on standard rates from the first pound.
Second home / additional property surcharge (England)
From 31 October 2024, the surcharge for additional residential properties increased from 3% to 5% on every band. That includes the nil-rate band: a £300,000 buy-to-let now attracts 5% on the first £250k and 10% on the next £50k — £17,500 total, where a first home would pay £2,500.
Scotland (LBTT) bands
Scotland's nil-rate threshold starts lower (£145,000), but the higher bands kick in earlier too:
| Portion of price | Rate |
|---|---|
| Up to £145,000 | 0% |
| £145,001 – £250,000 | 2% |
| £250,001 – £325,000 | 5% |
| £325,001 – £750,000 | 10% |
| Over £750,000 | 12% |
First-time buyers get a raised nil-rate band of £175,000 — a saving of up to £600. Modest by English standards, but Scotland's average prices are lower too.
The Additional Dwelling Supplement (ADS) is the Scottish equivalent of the English surcharge, and it works differently: 8% on the entire purchase price, in addition to the standard banded LBTT. Not added to each band — a flat 8% of the whole lot. It rose from 6% to 8% on 5 December 2024.
Wales (LTT) bands
Wales has the most generous nil-rate threshold in the UK, but no first-time buyer relief — the Welsh government's view is that the £225k threshold already covers most first homes.
| Portion of price | Rate |
|---|---|
| Up to £225,000 | 0% |
| £225,001 – £400,000 | 6% |
| £400,001 – £750,000 | 7.5% |
| £750,001 – £1,500,000 | 10% |
| Over £1,500,000 | 12% |
Higher residential rates for additional properties in Wales aren't a flat surcharge — since 11 December 2024 they use a separate band table starting at 5% from the first pound.
Common mistakes
Thinking a single pound across a threshold doesn't matter
It does, but less than people think. Because rates are banded, crossing £250,001 in England costs you 5p, not £12,500. The "cliff edges" people fear were mostly abolished in 2014.
Forgetting that "previously owned" means anywhere in the world
If you own a holiday flat in Spain, you are not a first-time buyer for SDLT or LBTT purposes — and you may owe the additional-property surcharge on a UK purchase. Properties inherited count.
Ignoring the second-home rules during a chain
If you complete on a new main home before selling your old one, you typically pay the higher rates upfront and reclaim the surcharge once the old home sells — within 36 months in England and Wales, 18 months in Scotland.
When to take advice
Stamp duty has more reliefs and edge cases than this guide can cover: mixed-use property, multiple dwellings, shared ownership staircasing, granny annexes (yes, really), uninhabitable properties, and corporate purchases all have their own treatment. If your purchase looks unusual, a tax-aware solicitor is worth their fee many times over.
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