TRW & Co · UK tax
Stamp Duty Land Tax: Rates, Surcharges and Reliefs
Stamp duty land tax is charged in slices on purchases of land and property in England and Northern Ireland. As of October 2026 residential bands start at £125,000, with a 5-point surcharge on additional dwellings, a 2% surcharge for non-residents and a 17% rate for companies buying homes above £500,000. Returns and payment are due within 14 days.
Key pointThe higher rates test counts dwellings anywhere in the world, including a spouse's, so an overseas flat can turn a first London purchase into a surcharged one; decide the buyer and structure before exchange.
At a glance
Residential threshold
Standard residential SDLT starts at £125,000, with bands of 2%, 5%, 10% and 12% applied to each slice of the price above it.
Additional dwelling surcharge
Buyers of additional dwellings and most companies pay 5 percentage points on top of every residential band, refundable if a previous main home is sold within three years.
Non-resident surcharge
A further 2% applies to residential purchases by buyers not present in the UK for at least 183 days in the 12 months before purchase.
Company 17% rate
Companies buying a dwelling for more than £500,000 pay a flat 17% on the whole price unless a rental, trading or development relief applies.
14-day deadline
The SDLT return must be filed and the tax paid within 14 days of completion, or penalties and interest apply; registration also depends on it.
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The short answer: how stamp duty land tax works in 2026
Stamp duty land tax (SDLT) is the tax a buyer pays on acquiring land or property in England and Northern Ireland. It is charged in slices: each rate applies only to the part of the price that falls within its band. As of October 2026, residential purchases start paying at £125,000, non-residential and mixed-use purchases at £150,000, and first-time buyers of homes costing £500,000 or less pay nothing on the first £300,000.
On top of the standard bands sit three adjustments that drive most of the cost in practice: a surcharge of 5 percentage points for buyers of additional dwellings (including most company buyers), a 2% surcharge for non-UK resident buyers of residential property, and a flat 17% rate for companies buying a dwelling for more than £500,000 unless a relief applies.
The buyer files the SDLT return and pays the tax within 14 days of completion. In most transactions the conveyancing solicitor does this on the buyer's behalf, but the legal liability remains the buyer's.
The legal framework and where SDLT applies
SDLT was introduced by Part 4 of the Finance Act 2003 and is administered by HM Revenue and Customs. The rates, surcharges and reliefs have been amended by successive Finance Acts, so the version of the rules that applies to a transaction depends on its "effective date", which is usually completion but can be earlier if the contract is substantially performed (for example, by the buyer taking possession or paying most of the price).
SDLT applies only in England and Northern Ireland. Scotland has Land and Buildings Transaction Tax, administered by Revenue Scotland, and Wales has Land Transaction Tax, administered by the Welsh Revenue Authority. These taxes have their own bands, surcharges and reliefs, so a buyer acquiring a portfolio across Great Britain must run three separate calculations.
The tax is charged on the "chargeable consideration": usually the price, but it also includes money's worth such as debt assumed, works carried out by the buyer as part of the deal, and in some cases VAT. Where land is transferred to a connected company, the market value rule can override the price actually paid.
Stamp duty land tax rates: residential and non-residential
The residential rates published by HMRC apply where you will own only one residential property after the purchase. The non-residential and mixed-use rates apply to commercial property, agricultural land, mixed-use buildings and purchases of six or more dwellings in a single transaction.
| Portion of price | Residential (standard) | Residential (additional dwelling) | Non-residential or mixed |
|---|---|---|---|
| Up to £125,000 | 0% | 5% | 0% (up to £150,000) |
| £125,001 to £250,000 | 2% | 7% | 2% (from £150,001) |
| £250,001 to £925,000 | 5% | 10% | 5% (above £250,000) |
| £925,001 to £1.5 million | 10% | 15% | 5% |
| Above £1.5 million | 12% | 17% | 5% |
Two points are easy to miss. First, the bands are cumulative: a £1 million home bought by a single-home buyer is taxed at 0% on the first £125,000, 2% on the next £125,000, 5% on the slice up to £925,000 and 10% on the remainder. Second, the non-residential top rate is 5%, which is why the classification of a property as residential, non-residential or mixed matters so much.
New leases
When a new lease is granted, stamp duty land tax is charged on any premium using the bands above and separately on the net present value (NPV) of the rent over the term. For residential leases, 1% applies to the NPV above £125,000. For non-residential leases, the NPV is taxed at 1% between £150,001 and £5 million and 2% above that. Assignments of existing leases are treated as purchases of the lease, so the rent element is not recalculated.
The surcharges: additional dwellings, non-residents and companies
Higher rates for additional dwellings
The higher rates add 5 percentage points to each residential band. HMRC's guidance on additional residential property explains that they generally apply where an individual buyer will own more than one dwelling worth £40,000 or more at the end of the day of completion and is not replacing a main residence. Worldwide property counts, so a buyer who owns a flat in Dhaka, Dubai or Singapore can be caught when buying a first home in London.
If you buy a new main home before selling your old one, you pay the higher rates at completion but can reclaim the surcharge if you sell the previous main home within three years. The refund claim must be made within 12 months of the later of the sale and the filing date of the return for the new home. Married couples and civil partners are treated as one unit, which can trigger the surcharge where one spouse already owns property.
Non-UK resident surcharge
Since 1 April 2021, a further 2% surcharge applies to residential purchases in England and Northern Ireland by non-UK residents. According to HMRC's non-resident guidance, an individual is non-resident for this purpose if they were not present in the UK for at least 183 days in the 12 months before the purchase. This test is separate from the statutory residence test used for income tax.
An individual who later spends at least 183 days in the UK during a continuous 365-day period, within a window running from 364 days before to 365 days after the effective date, can claim the 2% back by amending the return within two years. Companies are non-resident if they are not UK resident for corporation tax, and a UK company controlled from abroad can be caught by the close-company rules.
Companies and the 17% rate
Companies and other "non-natural persons" pay the higher rates on any dwelling, because they cannot have a main residence. Where a company buys a dwelling for more than £500,000, a flat 17% rate applies to the whole price unless a relief applies, for example for property rental businesses, development or trading. Those reliefs carry conditions over a period after purchase and link closely to the Annual Tax on Enveloped Dwellings, which our tax team reviews alongside SDLT for any corporate structure.
For an overseas family buying a London home through a company, the difference between the right and wrong structure can be several percentage points of the price, payable within 14 days of completion.
Reliefs and exemptions that change the answer
HMRC lists the main SDLT reliefs and exemptions. The ones we see most often in practice are:
- First-time buyers' relief: 0% up to £300,000 and 5% from £300,001 to £500,000. If the price is above £500,000, the relief is lost entirely, and every joint buyer must be a first-time buyer anywhere in the world.
- Group relief: transfers between companies in the same group can be relieved, subject to anti-avoidance rules and a clawback if the buyer leaves the group within a set period.
- Charities relief: available where the charity buys for qualifying charitable purposes.
- Divorce and dissolution: transfers between spouses or civil partners on divorce or dissolution are exempt, as are transfers for no consideration and property left in a will.
- Alternative property finance: Sharia-compliant arrangements are relieved so that the buyer is not taxed twice compared with a conventional mortgage.
- Property investment funds: reliefs exist for certain authorised fund structures, which matters for institutional investors.
Multiple dwellings relief, once widely used for portfolio and block purchases, was abolished for transactions completing on or after 1 June 2024, with a transitional exception for contracts exchanged on or before 6 March 2024 and not later varied. Where six or more dwellings are bought in a single transaction, they are treated as non-residential property, which is now the main structuring point on bulk residential acquisitions.
Reliefs must be claimed on the SDLT return, and some can be withdrawn later. Keep the evidence that supports a claim, such as group structure charts, charity objects or occupation plans, for the full enquiry window. HMRC enquiries into relief claims often focus on documents created after the event.
The process: from exchange to filing
For most purchases, SDLT is handled by the buyer's solicitor as part of the conveyancing. The steps below show where decisions are made.
- Establish the buyer profile. Confirm who is buying (individual, joint buyers, trust, company or partnership), each buyer's worldwide property holdings and UK presence in the last 12 months.
- Classify the property. Decide whether it is residential, non-residential or mixed, and whether any grounds or outbuildings change the classification. Mixed-use classification should be evidenced, not assumed.
- Identify linked transactions. Purchases between the same or connected parties that form part of a single scheme or series may be aggregated, pushing the price into higher bands.
- Calculate and test reliefs. Run the calculation with any applicable surcharges, then check first-time buyers' relief, group relief or other reliefs, and the conditions that must continue after completion.
- File and pay within 14 days. The return goes to HMRC and the tax must be paid within 14 days of completion; late filing and late payment attract penalties and interest.
- Register the purchase. HM Land Registry will not register most transfers without the SDLT certificate, so a filing error can hold up registration.
- Diarise refunds and clawbacks. Record the deadlines to reclaim the higher rates or the non-resident surcharge, and any period during which a relief can be withdrawn.
Illustrative scenario: an overseas family buying in London
This scenario is illustrative only. A family based outside the UK plans to buy a £2 million flat in central London. The parents already own homes abroad, and their adult daughter will live in the flat while studying.
If the parents buy in their own names, they pay the higher rates because they own other dwellings, plus the 2% non-resident surcharge unless they spend enough time in the UK. If a company buys, the 17% flat rate is likely to apply because the flat will be occupied by a family member and so does not qualify for the rental business relief, and the Annual Tax on Enveloped Dwellings will also need to be considered.
If the daughter buys in her own name and owns no other dwelling anywhere, the standard rates apply, possibly with the non-resident surcharge depending on her days in the UK. But that choice has inheritance tax, funding and control consequences, which is why stamp duty land tax should be decided alongside the wider structure. Our international private client team usually runs these questions together.
Common mistakes and risks
Overlooking property owned abroad
The higher rates test counts dwellings anywhere in the world. Buyers who own property overseas, or who hold an interest through an inheritance, often assume a London purchase is their only home. A spouse or civil partner's property is also counted. Missing this produces an underpayment that HMRC can pursue with interest and penalties, and the conveyancer's questionnaire answers are the first thing an enquiry will examine.
Treating a property as mixed-use without evidence
Because the non-residential top rate is 5%, buyers are often encouraged to claim that a paddock, woodland or annex makes a home "mixed-use". HMRC has challenged many of these claims and the tribunals have generally looked closely at how the land is actually used. Claims made on weak evidence, sometimes by refund agents after the event, can lead to a repayment of the relief plus penalties.
Assuming the company route saves tax
Buying a home through a company rarely reduces SDLT for an owner-occupier. The 17% rate and ATED usually make it more expensive, and reliefs from the 17% rate require a genuine rental, trading or development business. Where a corporate structure is needed for other reasons, model the SDLT, ATED, income tax and inheritance tax together before exchange.
Missing refund deadlines
The refund of the higher rates when a previous main home is sold, and of the non-resident surcharge when UK presence is later established, both depend on strict time limits. Many buyers simply forget. Diarise the dates at completion and keep evidence of travel and occupation, because HMRC may ask for it.
Ignoring linked transactions and connected sellers
Buying a flat and a parking space separately, or several units from the same developer, may be linked. Transfers to a connected company can be taxed on market value even if the price is lower. These rules catch commercial buyers as well as families and should be checked on every multi-unit deal.
Commercial property and corporate transactions
For commercial buyers, stamp duty land tax is usually a known cost but still affects deal structure. Buying the shares of a property-owning company generally attracts stamp duty on shares at a much lower rate than SDLT on the underlying land, which is one reason why share deals are common for larger assets. That route brings the company's history and liabilities with it, so the saving must be weighed against due diligence findings and warranty protection. See our guide to buying commercial property and our commercial property team.
Lease negotiations also have an SDLT dimension: rent-free periods, turnover rent, rent reviews and lease variations can all trigger further returns. Group reorganisations should be checked for group relief clawback before any company leaves the group.
Cross-border angle and what may change
For buyers connected with Bangladesh, the Gulf or Singapore, the non-resident surcharge and the worldwide property test are the two rules that most often change the cost. Residence for SDLT depends on days in the UK, not nationality or domicile, so a British citizen living abroad can be non-resident and a foreign national working in London can be resident. Our UK–Bangladesh property team can map holdings in both countries before a UK purchase.
As of October 2026, the rates above are those published on GOV.UK. The government has publicly ruled out changes to stamp duty in its first Budget this autumn, but rates and reliefs can change at any fiscal event, so check the position on the effective date. Our UK Budget tax changes guide tracks announcements as they happen.
What to do next: a stamp duty land tax checklist
- List every buyer and every dwelling each of them (and any spouse or civil partner) owns anywhere in the world.
- Count each buyer's days in the UK over the 12 months before the planned completion date.
- Decide the buying vehicle before exchange, not after, and model SDLT with ATED and other taxes.
- Confirm the property's classification and gather evidence if claiming non-residential or mixed rates.
- Check reliefs, their conditions and any clawback period.
- Diarise the 14-day filing date and any refund or clawback deadlines.
To discuss a purchase, a structure or an HMRC enquiry, contact our London office at Holborn Gate, 330 High Holborn, London WC1V 7QH, or email info@trw.co.
Frequently asked questions
01How much stamp duty will I pay on a £500,000 house?
For a buyer who will own only that home and is not a first-time buyer, SDLT on £500,000 is 0% on the first £125,000, 2% on the next £125,000 (£2,500) and 5% on the remaining £250,000 (£12,500), giving £15,000. A first-time buyer pays 0% up to £300,000 and 5% on the remaining £200,000, giving £10,000. If you will own another dwelling anywhere in the world, the 5-point surcharge applies to every band, and non-residents add a further 2%.
02Do I pay the higher rates if I own property abroad?
Usually yes. The additional dwelling test counts residential property anywhere in the world worth £40,000 or more, including property owned by a spouse or civil partner. If you are replacing your main residence, the surcharge does not apply, or can be reclaimed if you sell your previous main home within three years. Where the overseas property is inherited, held in a trust or only partly owned, the answer depends on the detail, so take advice before exchange.
03Who counts as non-resident for SDLT?
An individual is non-UK resident for the SDLT surcharge if they were not present in the UK for at least 183 days during the 12 months before the purchase. This is a separate test from the statutory residence test for income tax. If you later spend 183 days in the UK in a continuous 365-day period within the window set by HMRC, you can reclaim the 2% by amending the return within two years of the effective date.
04Can I avoid stamp duty by buying through a company?
Rarely, for a home you or your family will live in. Companies always pay the higher rates on dwellings and pay a flat 17% on dwellings above £500,000 unless a relief applies, and those reliefs require a genuine rental, development or trading business. Owner-occupied homes held in companies may also be subject to the Annual Tax on Enveloped Dwellings. Commercial property bought through a company share sale is different, because stamp duty on shares applies instead.
05Does stamp duty land tax apply in Scotland and Wales?
No. SDLT applies in England and Northern Ireland only. Scotland charges Land and Buildings Transaction Tax, administered by Revenue Scotland, and Wales charges Land Transaction Tax, administered by the Welsh Revenue Authority. Each has its own bands, surcharges and reliefs, so cross-border portfolios need separate calculations and returns.
06What happens if the SDLT return is filed late?
The return and payment are due within 14 days of completion. If either is late, HMRC charges penalties and interest, and HM Land Registry will generally not register the transfer without the SDLT certificate. Late filing also tends to attract closer scrutiny of any relief claimed. If you discover an underpayment after filing, correcting it promptly usually reduces the penalty exposure.
Sources and official materials
- Stamp Duty Land Tax: residential property rates (GOV.UK) — Current residential bands, first-time buyer relief and surcharges
- Stamp Duty Land Tax: non-residential and mixed rates (GOV.UK) — Commercial and mixed-use bands and lease NPV rates
- Stamp Duty Land Tax: reliefs and exemptions (GOV.UK) — List of SDLT reliefs and exempt transactions
- Buying an additional residential property (HMRC) — Higher rates, replacement of main residence and refunds
- Rates of SDLT for non-UK residents (HMRC) — The 2% surcharge, residence test and refunds
- Abolition of Multiple Dwellings Relief from 1 June 2024 (HMRC) — Policy paper and transitional rules
- Finance Act 2003 — Primary legislation establishing SDLT (Part 4)
General information only, current as at 21 October 2026. It is not legal advice and does not create a solicitor–client relationship. It reflects the law of England and Wales unless stated otherwise; Scotland and Northern Ireland have separate legal systems, and the law changes frequently. Check current official sources and take advice on the facts of your matter.