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Property purchases in the UK must be paid stamp duty by the buyer. In England and Northern Ireland, it is called Stamp Duty Land Tax (SDLT). In Scotland, it is Land and Buildings Transaction Tax (LBTT). Lastly, it is called Land Transaction Tax (LTT) in Wales.
In this guide, we break down the updated 2025 stamp duty land tax rates across all UK regions, covering both residential and non-residential properties. Let’s get you tax-ready before you sign on the dotted line.
Stamp Duty Land Tax Rates UK
Stamp duty bill is based on the following:
- How much the property is
- Whether an individual is a first-time buyer or not
- If the purchase is an additional property
- If the buyer is a UK resident or not
- Which region in the UK the property is bought
- When the property was purchased
- Whether the property is residential or not
- If non-residential, whether the property is freehold or leasehold
Check out our Stamp Duty Land Tax Calculator UK to determine stamp duty liabilities, verified by our tax experts upon request to ensure accurate results.
Updated Stamp Duty Land Tax Rates (Effective 31 March 2025)
As of March 2025, new Stamp Duty Land Tax (SDLT) rates have come into effect in England and Northern Ireland, replacing the temporary thresholds introduced in September 2022. These changes affect both first-time buyers and those purchasing additional properties, including buy-to-let and second homes.
Non-UK residents are still required to pay the additional 2% surcharge on top of standard SDLT rates.
For first-time buyers in England and Northern Ireland, tax relief still applies (with updated thresholds) offering reduced or zero stamp duty for properties within the new limits. The government continues to encourage homeownership by making it easier for first-time buyers to get on the property ladder through SDLT discounts and reliefs.
Visit relevant article: Do I Pay Tax if I Sell My House? A Beginner’s Guide
SDLT Rates 2025/26 for Residential Property
If you are purchasing a residential property in England or Northern Ireland, the amount of Stamp Duty Land Tax (SDLT) you pay depends on the property’s price and whether it’s a freehold or leasehold.
Freehold and Leasehold Premiums
For both freehold purchases and leasehold premiums (the upfront payment for a new lease), SDLT is calculated using the same rates:
| Property Price or Lease Premium (£) | SDLT Rate |
|---|---|
Up to £125,000 |
0% |
£125,001 to £250,000 |
2% |
£250,001 to £925,000 |
5% |
£925,001 to £1.5 million |
10% |
Over £1.5 million |
12% |
Note: These rates apply if the property becomes your main residence and you own no other residential property.
Leasehold Rent (Net Present Value)
If you are buying a new leasehold property and will pay more than a nominal rent, you will also need to pay SDLT on the Net Present Value (NPV) of the rent. The NPV is the total value of all the rent payments over the life of the lease, discounted to present-day values.
| NPV of Rent (£) | SDLT Rate |
|---|---|
Up to £250,000 |
0% |
Over £250,000 |
1% on the remaining amount |
Example Calculation
Suppose you are buying a new leasehold flat with a lease premium of £300,000. The annual rent is £5,000 for 99 years.
SDLT on Lease Premium:
- 0% on the first £125,000 = £0
- 2% on the next £125,000 (£125,001 to £250,000) = £2,500
- 5% on the remaining £50,000 (£250,001 to £300,000) = £2,500
- Total SDLT on premium = £5,000
SDLT on Rent (NPV):
Calculate the NPV of £5,000 annual rent over 99 years (this requires a specific formula or HMRC’s calculator)
- Assuming the NPV is £400,000:
- 0% on the first £250,000 = £0
- 1% on the remaining amount= 1% of £150,000 = £1,500
Total SDLT on rent = £1,500
Total SDLT Payable = £5,000 (premium) + £1,500 (rent) = £6,500
Note: This is a simplified calculation. For precise calculations, use HMRC’s SDLT calculator or consult one of our tax professionals.
SDLT on Non-Residential and Mixed-Use Properties
If you are purchasing non-residential or mixed-use property in England or Northern Ireland, different Stamp Duty Land Tax (SDLT) rates apply. These rates are applicable to both freehold and leasehold transactions.
What Qualifies as Non-Residential or Mixed-Use?
Non-residential properties include:
- Commercial properties like shops or offices
- Agricultural land that’s part of a working farm
- Forests
- Land not suitable for residential use
- Six or more residential properties bought in a single transaction.
Mixed-use properties have both residential and non-residential elements, such as a flat above a shop.
SDLT Rates for Freehold Sales and Lease Premiums
When buying a freehold or paying a lease premium for non-residential or mixed-use property, SDLT is calculated as follows:
| Price or Lease Premium (£) | SDLT Rate |
|---|---|
Up to £150,000 |
0% |
£150,001 to £250,000 |
2% |
Over £250,000 |
5% |
SDLT on Leasehold Rent (Net Present Value)
For new leasehold agreements, SDLT is also payable on the NPV of the rent:
| NPV of Rent (£) | SDLT Rate |
|---|---|
Up to £150,000 |
0% |
Over £150,000 |
1% |
Example Calculation
Suppose you are buying a commercial property for £275,000:
- 0% on the first £150,000 = £0
- 2% on the next £100,000 = £2,000
- 5% on the remaining £25,000 = £1,250
Total SDLT = £3,250
SDLT on Leasehold Properties
When you buy a leasehold property in England or Northern Ireland, SDLT) applies to both the lease premium and the rent you agree to pay over the lease term.
Residential Leasehold Purchases
Lease Premium:
For residential leasehold properties, the SDLT on the lease premium is calculated using the same rates as for freehold residential properties:
| Lease Premium (£) | SDLT Rate |
|---|---|
Up to £250,000 |
0% |
£250,001 to £925,000 |
5% |
£925,001 to £1.5 million |
10% |
Over £1.5 million |
12% |
Rent (Net Present Value - NPV):
If the total rent over the life of the lease (NPV) exceeds £250,000, you will pay SDLT at 1% on the portion over £250,000.
| NPV of Rent (£) | SDLT Rate on Rent |
|---|---|
Up to £250,000 |
0% |
Over £250,000 |
1% on the excess |
Non-Residential Leasehold Purchases
Lease Premium:
For non-residential leasehold properties, SDLT on the lease premium is calculated as follows:
| Lease Premium (£) | SDLT Rate |
|---|---|
Up to £150,000 |
0% |
£150,001 to £250,000 |
2% |
Over £250,000 |
5% |
Rent (Net Present Value - NPV):
If the NPV of the rent exceeds £150,000, SDLT is charged at 1% on the portion between £150,001 and £5 million, and 2% on any amount over £5 million.
| NPV of Rent (£) | SDLT Rate on Rent |
|---|---|
Up to £150,000 |
0% |
£150,001 to £5,000,000 |
1% |
Over £5,000,000 |
2% |
Reliefs and Exemptions for SDLT 2025/26
When buying property in England or Northern Ireland, you might qualify for certain Stamp Duty Land Tax (SDLT) reliefs or exemptions that can reduce or eliminate the tax you owe. Here’s a breakdown of the key reliefs and exemptions available:
First-Time Buyer Relief
If you are purchasing your first home and intend to live in it as your main residence, you can be eligible for First-Time Buyer Relief. This relief applies if the purchase price is £500,000 or less. Under this relief:
- You pay 0% SDLT on the first £300,000.
- You pay 5% SDLT on the portion between £300,001 and £500,000.
If the purchase price exceeds £500,000, the relief does not apply. Standard SDLT rates are charged on the entire amount.
Other Notable Reliefs
| Relief Type | Description |
|---|---|
Building Companies Buying Individual’s Home |
If a builder buys a homeowner’s existing property to facilitate the sale of a new home, SDLT is not payable on the acquired property, provided certain conditions are met. |
Employer Buying Employee’s Home |
When an employer purchases an employee’s home due to job relocation, the transaction can be exempt from SDLT if specific criteria are satisfied. |
Charity Purchases |
Charities buying property for charitable purposes can claim relief, reducing or eliminating SDLT liability. |
Right to Buy Transactions |
Purchases under the Right to Buy scheme are assessed for SDLT based on the discounted purchase price, not the property’s market value. |
Group Transactions |
Companies within the same group transferring property between them may qualify for group relief, exempting the transaction from SDLT. |
Exemptions from SDLT
Certain transactions are entirely exempt from SDLT. There is no tax on them, and in some cases, no return needs to be filed:
1. Gifts: Property transfers where no money or other consideration is exchanged.
2. Inheritance: Property acquired through a will.
3. Divorce or Dissolution: Transfers between spouses or civil partners due to divorce or dissolution agreements.
4. Low-Value Transactions:
a. Freehold properties purchased for less than £40,000.
b. New or assigned leases of 7 years or more, where the premium is under £40,000 and the annual rent is less than £1,000.
c. New or assigned leases of less than 7 years, where the total chargeable consideration is less than the SDLT threshold.
5. Alternative Finance Arrangements: Transactions compliant with Sharia law, where the alternative finance provider pays SDLT when acquiring the property.
FAQs
Why Do We Pay Stamp Duty in the UK?
Stamp duty taxation in the UK was initially introduced in 1694 to raise funds for the war against France, intended as a temporary measure. However, it became a successful revenue source for the government and continues to be applied to property transactions and various documents today.
Does Owning a Property Abroad Affect Stamp Duty in the UK?
Owning a property abroad does not exempt a person from paying stamp duty in the UK when purchasing an additional home. For instance, if someone owns a property in England and buys a holiday dwelling in Greece, they will still be liable for the tax.
How Does Stamp Duty Work in the UK?
Stamp Duty Land Tax (SDLT) in the UK operates on a tiered system, where different rates apply to different portions (or slices)of a property’s purchase price. As of March 2025, if you’re buying a property worth £600,000 and you are not a first-time buyer, you would pay 0% on the first £125,000, 2% on the next £125,000 (which equals £2,500), and 5% on the remaining £350,000 (which equals £17,500). This results in a total SDLT bill of £20,000.
What Are the Stamp Duty Changes in the UK for 2025?
As of 1 March 2025, the Stamp Duty Land Tax (SDLT) nil-rate threshold in England and Northern Ireland has officially reverted from £250,000 to £125,000. This means homebuyers now pay SDLT on any property purchase over £125,000, unless qualifying for first-time buyer relief.
Get Accurate Calculations on Your Stamp Duty Tax
To get an accurate calculation of your stamp duty land tax rates 2025, consult our tax experts a Legend Financial. We have been in the industry for over 12 years, so you can trust us to provide the most reliable advice on all tax affairs related to property ownership.
From working out your stamp duty obligations to filing your tax returns once the payment is due, and more, you have got us. Talk to one of our tax advisors today!
