Nil-Rate Band: The Zero-Rate Threshold
The nil-rate band is the portion of a property purchase price on which no stamp duty is charged. Below this threshold, the tax rate is 0%. The threshold varies by buyer type, tax region, and property use.
Last verified: April 2026 | Source: GOV.UK
Key Takeaways
- •SDLT nil-rate: £125,000 (standard, from April 2025); £300,000 for first-time buyers on homes up to £500,000.
- •LBTT nil-rate (Scotland): £145,000 standard; £175,000 for first-time buyers.
- •LTT nil-rate (Wales): £225,000 with no first-time buyer relief.
- •Additional property buyers pay a surcharge from the first pound — no nil-rate element applies.
In this article
Definition
The nil-rate band (also called the zero-rate band or threshold) is the portion of a property's purchase price that attracts a 0% stamp duty rate. No tax is charged on this portion of the price.
Because property transaction taxes use a progressive (tiered) rate structure, the nil-rate band acts as a built-in exemption that benefits all eligible buyers. Only the amount above the nil-rate threshold is taxed, and only at the rate that applies to that specific price band.
SDLT Thresholds (England and Northern Ireland)
| Buyer type | Nil-rate threshold |
|---|---|
| Standard residential (from 1 April 2025) | £125,000 |
| First-time buyer (property up to £500,000) | £300,000 |
| Non-residential land and property | £150,000 |
| Additional residential property | None (5% from £1) |
First-Time Buyer Thresholds
First-time buyers purchasing a property for £500,000 or less benefit from a higher nil-rate band of £300,000. They then pay 5% on the portion between £300,001 and £500,000.
If the property costs more than £500,000, first-time buyer relief does not apply — standard rates apply from £125,000.
LBTT Thresholds (Scotland)
In Scotland, the nil-rate threshold for residential LBTT is £145,000 for standard buyers and £175,000 for first-time buyers. These are distinct from SDLT and set by the Scottish Government.
LTT Thresholds (Wales)
In Wales, the nil-rate threshold for residential LTT is £225,000 for all buyers. There is no first-time buyer relief in Wales — all buyers have the same threshold.
Additional Properties: No Nil-Rate Element
Buyers of additional residential properties (second homes, buy-to-let) pay the higher rates surcharge. The higher rates apply from the very first pound of the purchase price — there is no nil-rate element for these buyers.
From 1 April 2025, the higher rates start at 5% on the portion up to £125,000. This means even a £50,000 additional property purchase incurs SDLT.
Official Government Source
For official SDLT rates and thresholds, see:
SDLT Residential Property Rates — GOV.UKFrequently Asked Questions
What is the nil-rate band for stamp duty?
The nil-rate band is the portion of a property purchase price on which no stamp duty is charged. From 1 April 2025, the SDLT nil-rate band for standard residential buyers in England is £125,000. First-time buyers have a nil-rate band of £300,000 on properties worth up to £500,000.
Does the nil-rate band apply to all buyers?
No. Additional property buyers pay higher rates starting from the first pound — there is no nil-rate element. The £125,000 nil-rate applies to buyers replacing their main residence or buying their first and only property.
Are nil-rate bands different in Scotland and Wales?
Yes. Scotland's LBTT nil-rate is £145,000 (£175,000 for first-time buyers). Wales's LTT nil-rate is £225,000 with no first-time buyer relief.
In this article
Emma Richardson, MRICS
Chartered Surveyor & Property Tax Specialist
Emma Richardson is a RICS-qualified Chartered Surveyor with over 12 years of experience in UK property taxation. She founded Calculate My Stamp Duty UK to help buyers understand the complex world of property transaction taxes.