Stamp Duty on buying a home in England: bands, reliefs and the 14-day deadline

Buying a home in England almost always comes with one more bill that people remember too late: Stamp Duty Land Tax. It is a tax on the transaction, and it is not charged on the whole price at one rate. Each slice of the price is taxed at its own rate. Here are the thresholds, the relief for first-time buyers, the surcharges and the deadline for filing and paying.

Where does Stamp Duty start in England?

Residential property is taxed from £125,000 — GOV.UK states the threshold as "£125,000 for residential properties". For non-residential and mixed land and property the threshold is higher, at £150,000. The tax applies in England and Northern Ireland. Scotland charges Land and Buildings Transaction Tax instead, and Wales charges Land Transaction Tax on sales completed on or after 1 April 2018.

What are the Stamp Duty rate bands?

For a single residential property the rates are: up to £125,000 — 0%; £125,001 to £250,000 — 2%; £250,001 to £925,000 — 5%; £925,001 to £1.5 million — 10%; above £1.5 million — 12%.

Take a home at £320,000. The first £125,000 is taxed at nothing. The next £125,000 at 2% comes to £2,500. The remaining £70,000 at 5% comes to £3,500. The total is £6,000. The most common mistake is to multiply the whole price by the top rate reached: that would give £16,000, almost three times the real bill.

How much does a first-time buyer pay?

First-time buyers have a higher threshold of £300,000, with 5% charged between £300,001 and £500,000. Above £500,000 the relief disappears entirely. GOV.UK puts it plainly: "If the price is over £500,000, you cannot claim the relief", and the standard rates then apply to the whole price.

The same £320,000 home costs a first-time buyer £1,000: nothing up to £300,000, then 5% on £20,000. That is £5,000 less than the standard calculation.

What does an additional property cost, and can the surcharge be refunded?

If you already own another residential property on the day you complete, you usually pay 5% on top of each band. On a £320,000 home that is an extra £16,000 — £22,000 instead of £6,000.

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The surcharge can be reclaimed when the new home replaces your previous main residence. The condition is that you sell or give away the previous main home within 3 years of buying the new one. For previous main homes sold on or after 29 October 2018, the claim must be made within 12 months of the later of two dates: the sale of the previous home, or the filing date of the return for the new purchase.

Companies have a separate rule: where the residential property costs more than £500,000, a 17% higher threshold rate may apply instead of the higher rates.

Do buyers who live outside the UK pay more?

Yes. Non-UK residents pay a 2% surcharge on residential property in England and Northern Ireland. You are treated as not a UK resident if you were not present in the UK for at least 183 days in the 12 months before the purchase. The 2% stacks on top of the other rates, including the 5% for an additional property.

Who files the return, and what happens if you are late?

The deadline is tight: the return must reach HMRC and the tax must be paid within 14 days of completion. If you use a solicitor, agent or conveyancer, they usually file the return and pay the tax on your behalf on completion day. If they do not, you have to do it yourself. Miss the 14-day deadline and HMRC may charge penalties and interest.

It is worth checking the figure in advance: HMRC publishes its own Stamp Duty Land Tax calculator, which works out the tax for your price and your circumstances. Run that calculation before you agree a price — alongside the deposit and legal fees, this tax shifts the numbers more than most buyers expect.