How UK Stamp Duty Is Calculated
Stamp Duty Land Tax (SDLT) is charged in slices. Each portion of the price is taxed at its own band rate and the results are added up. In England and Northern Ireland the standard bands are 0% up to £125,000, 2% to £250,000, 5% to £925,000, 10% to £1.5 million and 12% above that.
Example: a £295,000 home costs £0 + £2,500 + £2,250 = £4,750 in SDLT.
Want your own figure? Use our stamp duty calculator for England and Northern Ireland.
Stamp Duty Land Tax (SDLT) is the tax you pay when you buy a home or land in England or Northern Ireland above a certain price. Scotland uses Land and Buildings Transaction Tax (LBTT) and Wales uses Land Transaction Tax (LTT), which have their own bands. This guide covers SDLT on residential purchases only, using the rates on GOV.UK.
The SDLT bands for a single residential property
If the home will be the only residential property you own after the purchase, these standard rates apply (GOV.UK: residential property rates):
| Portion of the price | 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% |
| Above £1.5 million | 12% |
The key point is that a rate only applies to the slice of the price inside its band. Crossing from £250,000 to £250,001 does not make the whole price taxable at 5%; only the extra £1 is.
The SDLT formula
Effective rate = SDLT ÷ price × 100
To do it by hand, start at the bottom band, take the part of the price that falls inside it, multiply by the rate, then move up a band until you reach the price.
Worked example: £295,000 as a standard buyer
- First £125,000 at 0% = £0
- Next £125,000 (£125,001 to £250,000) at 2% = £2,500
- Final £45,000 (£250,001 to £295,000) at 5% = £2,250
- Total SDLT = £4,750, an effective rate of about 1.61%
This matches the example GOV.UK gives for a £295,000 purchase.
Worked example: £1,000,000
£0 on the first £125,000, £2,500 on the next £125,000, 5% of £675,000 = £33,750 on the slice up to £925,000, and 10% of £75,000 = £7,500 on the slice above that. Total SDLT is £43,750, about 4.4% of the price.
First-time buyer relief
If you and everyone you are buying with are first-time buyers, GOV.UK says you pay no SDLT up to £300,000 and 5% on the portion from £300,001 to £500,000. If the price is over £500,000, the relief cannot be claimed and the standard bands apply to the whole price.
- £400,000, first-time buyer: 0% on £300,000 and 5% on £100,000 = £5,000.
- £500,000, first-time buyer: 5% on £200,000 = £10,000, the same figure as GOV.UK's example.
- £600,000, first-time buyer: no relief, so standard bands give £0 + £2,500 + £17,500 = £20,000.
That last case shows a cliff edge: a first-time buyer paying just over £500,000 can owe much more than one paying exactly £500,000.
Surcharges: additional homes and non-UK residents
Additional property: you usually pay 5% on top of every band if buying the home means you will own more than one residential property. On £295,000 that gives 5% of £125,000 (£6,250) + 7% of £125,000 (£8,750) + 10% of £45,000 (£4,500) = £19,500. GOV.UK explains that you may not pay the higher rate if the purchase replaces your main residence and the previous one is sold within the allowed time.
Non-UK resident: a 2% surcharge usually applies if you were not present in the UK for at least 183 days in the 12 months before the purchase. As a standard buyer at £295,000, that is 2% + 4% + 7% across the three slices: £2,500 + £5,000 + £3,150 = £10,650. The surcharges can stack, so a non-resident buying an additional home may pay both.
What SDLT does not include
- Solicitor or conveyancer fees, surveys and mortgage arrangement fees.
- Special cases such as new leases with high rent, shared ownership, linked purchases, companies and purchases of six or more homes. GOV.UK lists these as having separate rules.
- Purchases in Scotland or Wales, which use LBTT and LTT.
Common mistakes
- Applying the top band rate to the whole price instead of only the slice above the threshold.
- Assuming first-time buyer relief tapers above £500,000. It stops completely.
- Forgetting the additional-property surcharge when you still own a previous home on completion day.
- Using old bands. Rates changed on 1 April 2025, so older articles and calculators may be wrong.
Practical takeaway
Work out SDLT band by band, check whether first-time buyer relief or a surcharge applies, and confirm the figure with your conveyancer or HMRC's own calculator before you exchange. The Talreon UK stamp duty calculator shows the band-by-band breakdown for any price.
Frequently asked questions
How is stamp duty calculated in the UK?
In England and Northern Ireland, SDLT is charged on slices of the price: 0% up to £125,000, 2% to £250,000, 5% to £925,000, 10% to £1.5 million and 12% above. Each slice is taxed at its own rate and the amounts are added.
How much stamp duty is due on a £295,000 house?
As a standard buyer, £4,750: 2% of £125,000 (£2,500) plus 5% of £45,000 (£2,250). A first-time buyer would pay nothing at that price.
Do first-time buyers pay stamp duty?
Not on the first £300,000. They pay 5% on the portion from £300,001 to £500,000. Above £500,000 the relief does not apply and standard rates are used.
How much is the stamp duty surcharge on a second home?
Usually an extra 5% on every band. On £295,000 that raises SDLT from £4,750 to £19,500.
Does stamp duty apply in Scotland and Wales?
No. Scotland uses Land and Buildings Transaction Tax and Wales uses Land Transaction Tax, each with its own rates.
Sources
Related tools
- UK stamp duty calculator — band-by-band SDLT for any price.
- Mortgage calculator — monthly repayment on the loan.
- ISA savings calculator — saving towards a deposit.
Related guides
- How mortgage payments are calculated
- How much house can I afford?
- First-time buyer stamp duty relief
- Second-home stamp duty surcharge
- UK stamp duty worked examples
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