If you're buying a house or land in the UK, you’ve probably heard the term stamp duty. It’s a tax you pay on the purchase price, and it can add a few thousand pounds to your costs. Knowing how it works before you sign the contract can save you from nasty surprises.
Stamp duty kicks in every time you buy residential property in England, Northern Ireland, or Wales for more than £125,000. If the price is lower, you won’t pay anything. Commercial properties and land have separate rates, and Scotland uses a different system called Land and Transaction Tax.
The tax is progressive, which means you pay different rates on different slices of the price. As of the latest rates, the first £125,000 is tax‑free, the next £125,001‑£250,000 is taxed at 2%, the slice up to £925,000 at 5%, then 10% up to £1.5 million, and 12% on anything above that. For example, a £300,000 home means you pay 0% on the first £125,000, 2% on the next £125,000 and 5% on the remaining £50,000.
First‑time buyers get a boost: there’s no stamp duty on the first £425,000 of a property up to £625,000. This can shave off a big chunk of the tax bill if you’re buying your first home.
Yes. If you’re buying a property for less than £125,000, you’re exempt. There are also reliefs for transfers between spouses or civil partners, and for certain corporate purchases. Buyers of newly built homes can claim a 3% discount on the standard rate, but only if the home costs under £500,000.
Another common relief is the “multiple dwellings” discount. If you’re buying a block of flats, you can apply a discount based on the number of separate units, which often reduces the overall tax.
In the last few years the government has tweaked the thresholds and rates several times. The most notable change was the temporary “stamp duty holiday” introduced during the pandemic, which lifted the zero‑rate threshold to £500,000 for a short period. Although that relief has ended, the higher thresholds for first‑time buyers remain.
Keep an eye on official announcements because the rates can shift with each budget. A small change in the threshold can mean a big difference in what you pay.
Plan your purchase price carefully. If you can stay just below a higher rate band, you’ll save a lot. Also, consider buying with a partner to split the price and possibly qualify for the first‑time buyer relief. Finally, work with a solicitor or conveyancer who can spot any eligible reliefs and apply them correctly.
Stamp duty might feel like a hidden cost, but with a bit of research you can understand exactly what you owe and how to reduce it. Use this guide as a starting point, and don’t hesitate to ask a professional for help when you’re ready to make an offer.
Angela Rayner will receive about £17,000 in severance after resigning as Deputy Prime Minister and Housing Secretary, weeks before new Labour rules would block payouts for ministers forced out over serious misconduct. Her exit followed findings that she breached the ministerial code after a probe into unpaid stamp duty on a Hove flat.