Stamp Duty Land Tax, explained
Why you don't pay one flat rate on the whole purchase price.
Stamp Duty Land Tax is charged in bands — like income tax — which means you don't pay one flat rate on the whole purchase price. Understanding the bands (and which set applies to you) changes the answer significantly.
How banded tax actually works
Only the portion of the price that falls within each band is taxed at that band's rate. For a standard home mover in England or Northern Ireland: nothing on the first £125,000, 2% on the next slice up to £250,000, 5% up to £925,000, 10% up to £1.5m, and 12% above that. A £400,000 purchase isn't taxed at one single rate — it's taxed in slices across the first three bands.
First-time buyer relief — and where it disappears
First-time buyers pay nothing up to £300,000, then 5% on the slice between £300,000 and £500,000. Crucially, this relief only applies up to a £500,000 purchase price — buy above that, and you lose the relief entirely and pay the standard home-mover rates on the full amount, not just the portion above £500,000.
The additional-property surcharge
Buying a second home or a buy-to-let property adds a flat surcharge on top of the standard rates — currently 5% — applied across the whole banded calculation, not just the excess. This surcharge is one of the most common reasons an estimate ends up much higher than a buyer expected.
England & Northern Ireland only
Scotland uses Land and Buildings Transaction Tax, and Wales uses Land Transaction Tax — both with their own bands and rates, separate from Stamp Duty Land Tax. If your purchase is in Scotland or Wales, an SDLT calculator won't give you the right number.
Worked example: a £350,000 purchase by a first-time buyer pays 5% only on the £50,000 between £300,000 and £350,000 — £2,500 total — rather than 5% of the full price.