Stamp duty (SDLT) in England:
what it is and how it is worked out

What stamp duty (SDLT) is and who pays it

Stamp Duty Land Tax (SDLT) is paid when you buy property or land over a certain price in England and Northern Ireland. Scotland has Land and Buildings Transaction Tax and Wales has Land Transaction Tax instead; this guide covers the rules for England only.

The buyer pays it, whether the home is freehold or leasehold, new or second-hand. The tax is usually worked out on the price you pay, which HMRC (the UK tax authority) calls the consideration.

According to GOV.UK, the amount depends on whether the property is residential or non-residential or mixed, and on whether you can claim a relief or exemption. For a home, being a first-time buyer, owning another home and not being UK resident each change the rate. You can see your own figure in our stamp duty calculator.

When and how it is paid: the 14-day rule

An SDLT return is filed and the tax paid within 14 days of the effective date of the transaction. That is usually the completion date. Your solicitor or conveyancer normally files the return and pays the tax on the day of completion, then adds it to their bill.

HMRC says that even when a representative files for you, you remain responsible for the return arriving on time and being correct. Penalties and interest can apply if the deadline is missed. Once the return is filed, HMRC issues an SDLT5 certificate, which goes with the application to register the property; keep a copy.

Apart from exceptions such as purchases below £40,000, a return is filed even when no tax is due, and you need one to claim a relief. Our title register guide covers the steps after completion.

How the bands work

Stamp duty is not one rate applied to the whole price. The price is split into bands and each band pays only its own rate, so the average rate you pay is below the rate of the top band. These are the rates in force since 1 April 2025:

Portion of the price	Standard rate	Higher rates and companies
Up to £125,000	0%	5%
£125,001 to £250,000	2%	7%
£250,001 to £925,000	5%	10%
£925,001 to £1,500,000	10%	15%
Above £1,500,000	12%	17%

A non-UK resident buyer adds 2 points to either column. The 17% in the last row is only the rate on the part above £1,500,000; do not confuse it with the flat 17% rate on the whole price that companies can pay, explained below.

HMRC’s example: on a £295,000 house, the first £125,000 pays 0% (£0), the next £125,000 pays 2% (£2,500) and the remaining £45,000 pays 5% (£2,250), a total of £4,750. That is the figure for a UK resident buyer with no other home who is not claiming first-time buyer relief.

The higher rates: your home in Türkiye counts

If at the end of the day of purchase you will own more than one home worth £40,000 or more, the higher rates usually apply: every band goes up by 5 points. Where the home is does not matter. A home in Türkiye, a share in a home and a home held for your child under 18 all count.

The rule also covers your spouse and anyone buying with you. Married couples and civil partners are treated as buying together even if only one of them buys. If the higher rates apply because of any one buyer, they apply to the whole purchase, even if you will live in the home yourself.

If you are replacing your main home and sold the old one before, or on the same day as, buying the new one, the higher rates do not apply. If you have not sold it yet, you pay them and can ask for a refund once the sale happens.

HMRC’s example: someone who owns their main home buys an additional property for £300,000. The first £125,000 pays 5% (£6,250), the next £125,000 pays 7% (£8,750) and the remaining £50,000 pays 10% (£5,000), a total of £20,000. As their only home it would have cost £5,000.

The 2% non-UK resident surcharge: the 183-day test

If you were not present in the UK for at least 183 days in the 12 months before buying, you are not UK resident for stamp duty. A 2% surcharge is then added on the whole price, on top of every other rate, including the higher rates and the first-time buyer rates.

The test is specific to stamp duty. Your nationality, visa, right to reside or the income tax residence test do not change it. A day counts only if you are in the UK at the end of it, and days in Scotland, Wales and Northern Ireland count as well as days in England.

If any joint buyer is non-UK resident, the whole purchase is treated as non-resident. But for a married couple or civil partners buying together who are not separated, if one of them is UK resident, both are treated as UK resident.

Days after the purchase can count too: if you spend 183 days in the UK in any continuous 365-day period between 364 days before and 365 days after the purchase, you can ask for the 2% back by amending the return within two years of the purchase. Every buyer must be an individual and meet the test.

HMRC’s example: a buyer with no other home who spent 77 days in the UK in the past 12 months buys a home for £700,000. Every band gets 2 points: 2% on the first £125,000 (£2,500), 4% on the next £125,000 (£5,000) and 7% on the remaining £450,000 (£31,500), a total of £39,000.

First-time buyer relief and its conditions

With first-time buyer relief, no tax is due on the first £300,000 and 5% applies between £300,001 and £500,000. Above £500,000 the relief is not reduced gradually; it is lost entirely and the standard rates apply.

Every buyer must be an individual, must never have owned a home anywhere in the world, and must intend to live in this one as their only or main home. Having owned a home in Türkiye, even one since sold, rules you out. A first purchase made to let out, and a company purchase, cannot claim it.

A non-UK resident buyer can claim the relief but still pays the 2% surcharge. In HMRC’s example a £500,000 first home pays £10,000; a non-UK resident first-time buyer pays £20,000 on the same home.

Buying through a company (Ltd/SPV)

You can buy a home through a company rather than in your own name: a limited company (Ltd), or a special purpose vehicle (SPV) set up only to hold property. For stamp duty the company is a separate buyer with its own rules.

A company pays the higher rates on every home worth £40,000 or more, whether or not it owns anything else. First-time buyer relief and the replacement of a main home are for individuals only. Up to £500,000, therefore, a company pays the same as an individual who already owns another home.

Above £500,000 the rule changes: on a company’s purchase of a single home, the whole price pays 17%, with no bands. The same rate applies to partnerships with a company as a member and to collective investment schemes.

A non-UK resident company adds 2 points to these: to the higher rates up to £500,000 and to the 17% above it. Without a relief, a non-UK resident company buying a £750,000 flat pays 19% of the price, £142,500.

Relief from the 17% rate: the rental business

If the home is bought for certain businesses, the company can claim relief from the 17% rate and pays the higher rates instead. GOV.UK lists these cases:

• Letting it out in a commercial property rental business
• Developing it for sale, or trading in property
• Using it in a trade that opens the property to the public
• A financial institution acquiring it in the course of lending
• Homes for the company’s employees, farmhouses, qualifying housing co-operatives

For a flat bought to let, the relevant one is the rental business relief. The home must be bought to earn rent in a property rental business run commercially and with a view to profit. The relief is claimed in the return.

The people who control the company, their spouses and close relatives (such as parents, siblings, children and grandchildren) are non-qualifying individuals. If one of them is allowed to live in the home, the relief is withdrawn, even if they pay a market rent.

The conditions are watched for three years after the purchase. If one fails in that time, the company files a further return and pays more tax.

If the home is not let straight away, the relief holds while reasonable steps are taken to let it (appointing a letting agent, redecorating, buying furniture), as long as those steps genuinely lead towards letting.

When a company counts as non-UK resident

A company that is not UK resident for corporation tax is not UK resident for stamp duty either. HMRC says that, as a general rule, a company incorporated in the UK is UK resident, and a company incorporated abroad is UK resident if its central management and control is in the UK.

A UK company faces a second test. If five or fewer participators control it (a close company) and that control sits with people who are non-UK resident for stamp duty, the company is treated as non-UK resident and the 2% applies.

Each participator’s status depends on whether they spent 183 days in the UK in the year up to and including the purchase date. Unlike for individuals, days after the purchase do not count, so a company cannot reclaim the 2% later.

For example, a UK company whose shares all belong to someone living in Türkiye, who spent fewer than 183 days in the UK in the past year, is non-UK resident under this test.

In one of HMRC’s examples, only one of two shareholders is non-resident and owns half the shares; as she does not control the company alone, there is no 2%. The rights of relatives such as siblings can be counted together.

ATED: the company’s annual tax

The Annual Tax on Enveloped Dwellings (ATED) is a yearly tax paid mainly by companies, partnerships with a company as a partner and collective investment schemes that own a UK home valued at more than £500,000. Each period runs from 1 April to 31 March.

Value of the home	1 April 2026 to 31 March 2027
More than £500,000 up to £1 million	£4,600
More than £1 million up to £2 million	£9,450
More than £2 million up to £5 million	£32,200
More than £5 million up to £10 million	£75,450
More than £10 million up to £20 million	£151,450
More than £20 million	£303,450

For a home bought after 1 April 2022, the value is its value on the purchase date. The return is due by 30 April each year; for a home bought during a period, within 30 days of the purchase; for a new-build, within 90 days of it entering the council tax list or first being occupied.

A relief can be claimed if the home is let commercially to tenants unconnected with the owner and no connected person lives in it or has it available to live in. Even if the relief brings the tax to nil, a Relief Declaration Return is filed every year, and a late return can bring a penalty.

The company’s own duties

Buying through a company brings the company’s own yearly work. The main items GOV.UK lists are:

• A confirmation statement to Companies House every year, checking the registered office, directors, shareholders and SIC code.
• Annual accounts: the first within 21 months of incorporation, later ones within 9 months of the end of the financial year.
• Corporation Tax: paid 9 months and 1 day after the accounting period ends; the Company Tax Return is due within 12 months, even if no tax is owed.
• People with significant control (PSC): anyone with more than 25% of the shares or voting rights, or who otherwise controls the company, is reported; changes to them and to directors within 14 days.
• Identity verification: since 18 November 2025, directors and people with significant control must verify their identity for Companies House.
• A separate bank account and accounting records: the company’s money is kept apart from the owners’ money.

If the company is set up in Türkiye or another country, it must register on the Register of Overseas Entities at Companies House before buying UK property; our title register guide has the details.

How rent is taxed inside the company, taking money out as salary or dividends, and the tax on a sale are separate questions. They are outside this guide; talk to your tax adviser.

Individual or company? Questions to ask

Which suits you depends on your personal and tax position; this guide does not recommend either route. Before deciding, ask your tax adviser and your solicitor:

• Who will live in the home? If you, your spouse or relatives will, the company’s rental reliefs, for stamp duty and for ATED, do not apply.
• Is the price above £500,000? If so, the 17% rate, the relief conditions and the yearly ATED return come into play.
• Are you and the company UK resident for stamp duty? A company cannot reclaim the 2% later; an individual can, under conditions.
• Is this your first home? The relief is only for individuals, for a home they will live in.
• If you will use a mortgage, does the lender lend to a company, and on what terms?
• How do the rent, money taken out of the company and the tax on a sale work for you in the UK and in Türkiye?
• Who will run the company’s yearly work (accounts, returns, Companies House), and at what cost?

New-build and off-plan purchases: when the tax arises

On an off-plan purchase you pay deposits at reservation and at exchange of contracts, but stamp duty does not usually arise then. It arises on the effective date, which is usually completion, and the 14 days run from that date.

The effective date can be earlier. If before completion you get the keys and the right to move in, or you pay substantially all of the price (HMRC’s guide: generally 90% or more), the contract is substantially performed and the tax arises on that date.

The residence test and the question about other homes are also answered at the effective date. Months can pass between reservation and completion, so count your 183 days and check whether you will own another home by reference to completion. If rates change in between, transitional rules can apply; ask your solicitor. Our off-plan guide covers the other steps.

Refunds: selling your old home within three years

If you buy a new main home before selling your old one, you pay the higher rates. If you sell your previous main home within three years of the new purchase, you can ask for the higher-rates part back.

HMRC must receive the claim within 12 months of the later of the sale date and the filing date of the return for the new home. There is no refund if you or your spouse still own part of the old home, or if the higher rates apply for another reason.

The three years are not extended except in exceptional circumstances such as government restrictions; not finding a buyer or a broken chain do not count. HMRC usually pays a refund into your bank account within 15 working days of the claim. The refund of the 2% surcharge is covered above, under residence.

Worked examples: the same £750,000 flat

Imagine five different buyers for the same flat. The figures use the rates in force since 1 April 2025 and leave out other costs such as legal fees.

Buyer and position	Stamp duty
1 · Individual, UK resident, no other home	£27,500
2 · Individual, UK resident, owns a home in Türkiye	£65,000
3 · Individual, non-UK resident, owns a home in Türkiye	£80,000
4 · Company (Ltd/SPV), non-UK resident, with rental business relief	£80,000
5 · Company (Ltd/SPV), non-UK resident, no relief	£142,500

1. Standard rates: 0% on the first £125,000, 2% on the next £125,000 (£2,500) and 5% on the remaining £500,000 (£25,000), a total of £27,500. Because the price is above £500,000, a first-time buyer pays the same.

2. Higher rates: 5% on the first £125,000 (£6,250), 7% on the next £125,000 (£8,750) and 10% on the remaining £500,000 (£50,000), a total of £65,000. The £37,500 difference from buyer 1 comes from the home in Türkiye.

3. The higher rates plus 2% of the price (£15,000): £80,000.

4. With the relief the company also pays the higher rates, plus 2% as it is non-UK resident: £80,000. A UK resident company would pay £65,000.

5. Without a relief, 17% of the whole price (£127,500) plus 2% (£15,000): £142,500. At a price of £500,000 or less, the 17% would not come into it at all.

You can see your own figures in the stamp duty calculator by choosing individual or company. The purchase cost calculator shows the total cash you need, including the tax, and when each payment falls.