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SDLT - Frequently Asked Questions
Stamp Duty Land Tax (SDLT) is a key part of property transactions in England and Northern Ireland, but the rules can be confusing due to varying rates, thresholds, and reliefs. This FAQ addresses the most common questions to help you understand how SDLT applies in different situations.
1. What is SDLT?
Stamp Duty Land Tax (SDLT) is a tax payable when you buy property or land in England or Northern Ireland. It applies to both residential and non-residential property transactions, including some leases. The amount depends on the property price and your circumstances as a buyer (e.g., first-time buyer, second home, investor).
2. When do I need to pay SDLT?
You must pay SDLT when you purchase residential property costing more than £125,000 (or more than £40,000 if it is an additional property).
First-time buyers benefit from higher nil-rate thresholds.
Non-residential and mixed-use properties have different thresholds.
3. How is SDLT calculated?
SDLT is calculated progressively. Different portions of the purchase price are taxed at different rates (like income tax).
Current residential SDLT rates (from 1 April 2025):
£0 – £125,000 → 0%
£125,001 – £250,000 → 2%
£250,001 – £925,000 → 5%
£925,001 – £1.5 million → 10%
Above £1.5 million → 12%
Example:
If you buy a home for £600,000:
0% on the first £125,000
2% on the next £125,000
5% on the remaining £350,000
4. Who is responsible for paying SDLT?
The buyer pays SDLT, not the seller. Payment must be made to HMRC within 14 days of completion. In practice, your solicitor or conveyancer usually handles the submission and payment.
5. Are there any exemptions or reliefs from SDLT?
Yes, several reliefs apply:
First-time buyers: No SDLT on the first £300,000 of the property price (if the property costs £500,000 or less).
Multiple dwellings relief (MDR): Applies if you buy more than one property in a single transaction.
Non-residential/mixed-use properties: Charged at different (often lower) rates.
Charities and public bodies: Certain transactions may qualify for exemptions.
6. What happens if I don’t pay SDLT on time?
Late payment may result in penalties and interest charges from HMRC. Your solicitor normally ensures payment is made, but it’s your responsibility to confirm.
7. Do I need to pay SDLT if I’m remortgaging a property?
No. Remortgaging does not trigger SDLT, as long as no ownership interest is transferred.
8. What SDLT changes should I be aware of?
From 1 April 2025, thresholds reverted to pre-September 2022 levels (nil rate band £125,000; first-time buyer relief up to £300,000/£500,000).
From 31 October 2024, the surcharge on additional properties increased from 3% to 5%.
Future budgets may adjust these rates again, so always check current guidance before buying.
9. How does SDLT apply to second homes or buy-to-let properties?
If you buy an additional residential property (second home, holiday let, buy-to-let), you must pay a 5% surcharge on top of the standard rates. This applies to properties costing £40,000 or more.
10. Can SDLT be refunded?
Yes, in some cases. For example, if you pay the higher rates for an additional property but sell your previous main home within three years, you may be able to claim a refund of the surcharge.
11. How can I get help with SDLT?
Most buyers rely on a solicitor or conveyancer to calculate and submit SDLT correctly. For complex cases (such as multiple dwellings, mixed-use, or corporate ownership), a tax adviser may be needed. Official guidance is available on the HMRC website.
Due to these complexities, buyers often rely on solicitors, conveyancers, or tax specialists to ensure the correct SDLT is calculated and paid. Misunderstandings or mistakes can result in overpayment or penalties for underpayment, making SDLT a tax where attention to detail is crucial.