Stamp Duty Land Tax: Bands, First-Time Buyer Relief and the 5% Surcharge
Stamp Duty Land Tax (SDLT) is the tax paid when you buy a residential property in England or Northern Ireland, charged in bands on the portion of the price inside each band: 0% up to £125,000, 2% to £250,000, 5% to £925,000, 10% to £1.5 million and 12% above. Scotland charges Land and Buildings Transaction Tax and Wales Land Transaction Tax, with their own bands.
Bands apply to slices. On a £400,000 home a mover pays nothing on the first £125,000, 2% on the next £125,000 (£2,500) and 5% on the remaining £150,000 (£7,500) — £10,000 in total. The nil-rate band fell from £250,000 back to £125,000 on 1 April 2025 when the temporary cut expired, which roughly doubled the bill for a typical purchase overnight.
First-time buyers get relief: no SDLT on the first £300,000 and 5% on the portion between £300,000 and £500,000, provided the price is £500,000 or less — a penny over and the relief disappears entirely. Every buyer on the deed must be a first-time buyer, and the property must be your main home. On a £350,000 first purchase the saving is £5,000.
Buying a second home, a buy-to-let, or completing on a new home before selling the old one adds a 5% surcharge to every band, including the nil-rate band, and non-UK residents pay a further 2%. The surcharge is refundable if the previous main home is sold within three years. Companies and purchases over £500,000 by certain buyers face a flat 15% rate.
SDLT is due within 14 days of completion, usually paid through your conveyancer, and it comes from your own funds, not the mortgage — so it competes directly with the deposit. On a £400,000 purchase at 90% loan-to-value the £10,000 duty is a quarter of the £40,000 deposit. It is not deductible against income and does not add to your equity, though for a landlord it forms part of the acquisition cost when capital gains tax is calculated on sale.
Because it is charged on each transaction, SDLT rewards moving rarely and penalises stepping up the ladder in small increments. Factor it into any move alongside estate agent fees, legal costs and the mortgage product fee, and for a first home remember that a Lifetime ISA bonus of up to £1,000 a year is one of the few tools that reduces the cash needed on completion day.
Richify includes SDLT, legal fees and moving costs in your home-purchase target so the amount you save toward is the amount you hand over on completion.
