Stamp Duty Land Tax (SDLT) is a government tax payable when you purchase a property or land in England and Northern Ireland. The amount you pay depends on the purchase price and your circumstances. Scotland has the Land and Buildings Transaction Tax (LBTT) and Wales has the Land Transaction Tax (LTT), which work on similar principles but with different thresholds and rates.
SDLT is calculated on a tiered basis — you pay different rates on different portions of the property price, similar to income tax bands. First-time buyers benefit from relief that increases the nil-rate threshold, meaning they pay less (or nothing) on properties up to a certain value. Additional properties (such as buy-to-let or second homes) attract a 5% surcharge on top of standard rates.
SDLT must be paid within 14 days of completion, and your solicitor usually handles the payment and filing as part of the conveyancing process. The tax can represent a significant upfront cost, particularly for higher-value properties or additional property purchases, so it should be factored into your budget from the outset.
You buy a home for £350,000 as a non-first-time buyer (using current rates). You pay 0% on the first £250,000 and 5% on the remaining £100,000, totalling £5,000. If this were a second property, you would pay an additional 5% surcharge on the full price (£17,500), bringing the total to £22,500.
Key Points
- A government tax on property purchases in England and Northern Ireland
- Calculated on a tiered basis with different rates at different thresholds
- First-time buyers benefit from higher nil-rate thresholds
- A 5% surcharge applies to additional properties such as buy-to-let
- Must be paid within 14 days of completion via your solicitor