Answers to the most common questions about UK Stamp Duty Land Tax
Below you will find answers to the questions we are asked most frequently about Stamp Duty Land Tax (SDLT). If you cannot find the answer you need, please refer to our comprehensive guide or consult a qualified solicitor or tax adviser for advice specific to your situation.
HMRC defines a first-time buyer as someone who has never owned a freehold or leasehold interest in a residential property, anywhere in the world. This includes properties you may have owned abroad, inherited interests in property, or properties held through a trust in some cases. If you are buying jointly with another person, both of you must meet the first-time buyer definition for the relief to apply.
It is also important that the property you are buying costs £625,000 or less, and that you intend to live in it as your main residence. Buy-to-let purchases do not qualify for first-time buyer relief, even if you have never owned a property before.
If you are purchasing jointly and one of you already owns a property, you will not qualify for first-time buyer relief. The purchase will be assessed under the standard SDLT rates. Additionally, if the partner who already owns a property will still own it after the joint purchase completes, the 3% additional property surcharge may also apply, as this would count as an additional property for that individual.
This is a common situation that catches people out. If your partner owns a buy-to-let or has inherited a property, it is worth taking legal advice to understand the full SDLT implications before proceeding.
Yes. The 3% additional property surcharge applies to any additional residential property you purchase, including second homes, holiday homes, and buy-to-let investments. The surcharge is added on top of the standard SDLT rates for each band. For example, on the first £250,000 of the purchase price, you would pay 3% instead of 0%, and on the portion between £250,001 and £925,000, you would pay 8% instead of 5%.
The surcharge applies if, at the end of the transaction, you own two or more residential properties. Properties owned anywhere in the world are taken into account, not just those in the UK.
If you have inherited a share of a property, it may or may not trigger the additional property surcharge when you buy a new home. The key factor is the size of your inherited share and how recently you inherited it. If you inherited a 50% or greater share of a property within the three years before your new purchase, it will count as an additional property. However, if you inherited less than a 50% share, or if the inheritance was more than three years ago, it generally will not count.
These rules can be complex, so if you have inherited any interest in a property and are planning to buy, it is sensible to check with your solicitor before assuming whether the surcharge applies.
Transfers of property between spouses or civil partners as part of a divorce or dissolution do not attract SDLT, provided the transfer is made under a court order. This exemption also applies to transfers made as part of a formal separation agreement.
However, if you are buying a new property following a divorce and you still have an interest in the former marital home, the 3% surcharge may apply. Once the former marital home is sold or transferred to your ex-partner, you may be able to claim a refund of the surcharge if the disposal happens within 36 months. The rules around divorce and stamp duty can be complicated, particularly where the timing of property transfers is concerned, so professional advice is recommended.
Yes. Buy-to-let properties are subject to the standard SDLT rates plus the 3% additional property surcharge, assuming you already own a main residence. This applies regardless of whether the buy-to-let is your first investment property or your tenth. First-time buyer relief is not available for buy-to-let purchases.
If you are a first-time buyer and your very first property purchase is a buy-to-let (rather than a property you intend to live in), you will pay the standard rates but may not qualify for first-time buyer relief, as the relief requires the property to be your main residence.
No. Remortgaging your existing property does not trigger SDLT because you are not purchasing a new property — you are simply changing your mortgage lender or product. SDLT is only payable when there is a transfer of ownership of land or property. If you are remortgaging to release equity, no SDLT is due.
However, if your remortgage involves a transfer of ownership — for example, adding or removing a partner from the title — SDLT may be payable on the consideration given for the transfer. In most cases where there is no monetary consideration (such as adding a spouse to the title), no SDLT is due, but it is worth confirming with your solicitor.
SDLT is calculated and due based on the completion date, not the exchange date. The completion date is when the property legally changes hands, the buyer pays the remaining purchase price, and the keys are handed over. If SDLT rates change between exchange and completion, it is the rates in force on the completion date that apply.
This is particularly relevant when the government announces changes to SDLT thresholds or rates. If you exchange contracts before a rate change but complete afterwards, you will pay the new rates. Conversely, if you complete before a rate increase takes effect, you benefit from the lower rates even if exchange happened earlier.
You must submit your SDLT return and pay the tax within 14 days of the completion date. Your solicitor or conveyancer will normally handle this process for you. The SDLT return is filed electronically with HMRC, and the payment is usually made by your solicitor from the completion funds.
It is extremely important to meet this deadline. Failure to file the return on time results in automatic penalties, and interest is charged on any unpaid tax from day 15 onwards. Most solicitors build the SDLT process into their standard completion procedures, so delays are rare, but you should always check that it has been done.
If the SDLT return is filed late, HMRC will impose a fixed penalty of £100 if it is up to three months late, rising to £200 if it is more than three months late. For returns that are more than 12 months late, HMRC can impose much higher tax-related penalties based on the amount of SDLT due.
In addition to these fixed penalties, interest is charged on any unpaid SDLT from the filing date (14 days after completion) until the date of payment. The interest rate is set by HMRC and can add up significantly if payment is delayed for several months. In serious cases of non-compliance, HMRC may also launch an investigation into the transaction.
Yes. SDLT applies to leasehold purchases in a similar way to freehold purchases, but there is an additional consideration. When you buy a new lease (as opposed to an existing lease being assigned to you), you may be liable for SDLT on both the purchase price (the "premium") and the net present value (NPV) of the rent payable over the life of the lease.
For most residential leasehold purchases, the SDLT on the premium is calculated in the same way as a freehold purchase. The NPV element only becomes significant for very long leases with high annual rents. When buying a flat (which is usually leasehold), the SDLT is typically calculated only on the purchase price. Your solicitor will calculate any additional liability from the NPV of rent if applicable.
A gifted deposit does not affect the amount of SDLT you pay. Stamp duty is calculated on the purchase price of the property, not on how much you borrow or how your deposit is funded. Whether your deposit comes from your own savings, a gift from family, or a combination of both, the SDLT liability remains the same.
However, it is important to distinguish between a gifted deposit and a situation where someone else is purchasing a share of the property. If a family member is named on the title (for example, to help you get a mortgage), this may have SDLT implications, particularly if they already own another property. A straightforward cash gift towards your deposit, with no interest in the property, has no effect on your stamp duty calculation.
Yes, in certain circumstances. The most common scenario is where you have bought a new main residence before selling your previous one. If you paid the 3% surcharge on your new purchase, you can apply for a refund once you sell the old property, provided the sale completes within 36 months of the new purchase. You must apply for the refund within 12 months of the sale of the old property, or within 12 months of the filing date of the SDLT return for the new purchase, whichever is later.
To claim the refund, you can amend your original SDLT return online or write to HMRC. Make sure you have all the relevant transaction details to hand, including the date of completion for both the purchase and the sale. Refunds are typically processed within a few weeks of HMRC receiving a valid claim.
Stamp duty rules can be complex, especially in situations involving multiple properties, inheritance, divorce, or company structures. For specific advice tailored to your circumstances, we recommend consulting a qualified solicitor or tax adviser.
For a detailed overview of how stamp duty works, including rates, thresholds, and worked examples, visit our complete guide to UK stamp duty. To calculate your stamp duty instantly, use our free calculator.