How Is Stamp Duty Calculated?
Stamp duty is calculated in slices. The price is split into bands and each slice is taxed at its own rate, so you never pay the top rate on the whole price. This guide shows the method step by step, with band-by-band examples for every buyer type in England, Northern Ireland, Scotland and Wales.
Key Takeaways
- SDLT uses progressive bands like income tax: only the portion of price in each band is taxed at that rate, never the whole amount
- Crossing a band threshold never causes a sudden jump in total tax; £1 extra only adds tax on that £1, not the full price
- The effective rate is always lower than your highest band rate because lower portions are taxed less (e.g., 2.5% on £400k vs 5% top band)
- Surcharges stack on top of base rates in every band: non-UK residents buying second homes pay base + 5% additional + 2% non-resident in each slice
- Scotland's nil-rate band is £145,000 (vs England's £125,000), saving up to £400 on an identical property priced at or below £145,000
- Wales uses separate band structures for additional properties rather than flat surcharges; higher rate bands differ significantly from standard
- First-time buyers pay 0% on the first £300,000 (vs standard 0%/2%/5% across three bands), saving £5,000 on a £300k property
- Corporate buyers that cannot claim a relief pay a flat 17% on the whole price once it exceeds £500,000 (raised from 15% on 31 October 2024), so a £1m purchase costs £170,000 rather than £150,000 at 15%. A company letting the property claims relief and pays standard rates plus 5% instead
The Key Concept: Tiered Rates
Stamp duty uses a tiered (or marginal) system, similar to income tax. You don't pay a single rate on the whole property price. Instead, different portions of the price are taxed at different rates. This is why the effective rate is always lower than the highest band rate.
How to Work Out Stamp Duty in Four Steps
You can work out stamp duty by hand with the same method HMRC uses. It takes four steps:
- Find the taxable price. This is usually the price you agreed to pay. Separately priced furniture and other moveable items come off it, and any mortgage debt you take on is added (see what price is taxed).
- Pick the right rate table. The table depends on where the property is (SDLT in England and Northern Ireland, LBTT in Scotland, LTT in Wales) and on who is buying: a first-time buyer, a home mover, someone who will own more than one home, or a company.
- Split the price into bands. Cut the price at each threshold in that table. A £600,000 home in England splits into £125,000, £125,000 and £350,000.
- Multiply each slice by its rate and add them up. £0 + £2,500 + £17,500 = £20,000. Add any surcharge to each band before you multiply.
The result is the tax due on your return. Divide it by the price to get your effective rate. Our stamp duty calculator runs the same steps and shows each band, if you would rather check your own figure.
Quick Lookup by Price
The table below shows exactly how much stamp duty you will pay in 2026 at common property prices in England and Northern Ireland. For an exact figure, use our stamp duty calculator or one of our Stamp Duty Land Tax calculators, or see the full stamp duty by property price breakdown covering 20 price points from £250,000 to £2 million with regional comparisons.
| Property Price | Standard Buyer | First-Time Buyer | Additional Property |
|---|---|---|---|
| £150,000 | £500 | £0 | £8,000 |
| £200,000 | £1,500 | £0 | £11,500 |
| £250,000 | £2,500 | £0 | £15,000 |
| £300,000 | £5,000 | £0 | £20,000 |
| £400,000 | £10,000 | £5,000 | £30,000 |
| £500,000 | £15,000 | £10,000 | £40,000 |
| £750,000 | £27,500 | No relief* | £65,000 |
| £1,000,000 | £43,750 | No relief* | £93,750 |
*First-time buyer relief is not available on properties over £500,000. Standard rates apply instead. Additional property figures include the 5% surcharge on second homes and buy-to-let purchases.
These amounts are calculated using the progressive band system explained below. The stamp duty you pay depends on three factors: the purchase price, your buyer type, and whether you already own property. Read on for a full breakdown of how the calculation works.
The Stamp Duty Bands (England & NI)
These are the standard SDLT rates for residential purchases completing in 2026. Use our stamp duty calculator to calculate your exact liability:
| Band | Rate |
|---|---|
| £0 - £125,000 | 0% |
| £125,001 - £250,000 | 2% |
| £250,001 - £925,000 | 5% |
| £925,001 - £1,500,000 | 10% |
| Over £1,500,000 | 12% |
Progressive Band System Explained
Stamp duty works like income tax: it uses a progressive (or marginal) rate system. This means different portions of the property price are taxed at different rates, not the entire price at one single rate.
Think of it Like a Layered Cake
Imagine the purchase price as a layered cake:
- •The bottom layer (£0-£125k) is tax-free
- •The second layer (£125k-£250k) is taxed at 2%
- •The third layer (£250k-£925k) is taxed at 5%
- •And so on for higher bands
You only pay the higher rate on the portion of the price within that band, not on the whole price.
This is why crossing into a new band doesn't suddenly make your entire stamp duty bill jump. Only the amount above the threshold is taxed at the higher rate.
Step-by-Step Calculation
Let's work through an example for a £400,000 property purchase:
Example: £400,000 Property
Band-by-Band Breakdown at Every Price
The table shows how much tax each band adds for a standard buyer (a home mover) in England or Northern Ireland. Read across a row to see where the bill comes from.
| Price | 0% to £125k | 2% to £250k | 5% to £925k | 10% to £1.5m | 12% above | Total | Effective rate |
|---|---|---|---|---|---|---|---|
| £250,000 | £0 | £2,500 | £0 | £0 | £0 | £2,500 | 1.00% |
| £600,000 | £0 | £2,500 | £17,500 | £0 | £0 | £20,000 | 3.33% |
| £1,000,000 | £0 | £2,500 | £33,750 | £7,500 | £0 | £43,750 | 4.38% |
| £2,000,000 | £0 | £2,500 | £33,750 | £57,500 | £60,000 | £153,750 | 7.69% |
On the £2 million purchase, the 10% and 12% bands produce £117,500 of the £153,750 bill. That is why the effective rate climbs quickly above £925,000. For any other price, see thestamp duty by property price tables.
What Price Is Stamp Duty Worked Out On?
Stamp duty is charged on the chargeable consideration: everything you give in return for the property, in money or money's worth. In most purchases that is simply the agreed price. These items change it:
- Furniture and moveable items: carpets, curtains, white goods and furniture are not land, so a fair, separately agreed price for them comes off the taxable figure. HMRC challenges values that are inflated to get under a threshold.
- Mortgage debt you take on: if you take over a share of a mortgage, for example when you are added to a partner's home, that share of the debt counts as consideration. Our transfer of equity calculator works this out.
- VAT: where VAT is charged on a commercial purchase, stamp duty is worked out on the VAT-inclusive price.
- New leases: tax is due on the premium and on the net present value of the rent, using a separate rent table. See the lease NPV calculator.
Your deposit and mortgage do not change the figure. A £300,000 home bought with a £30,000 deposit is taxed on £300,000.
Common Misconception: Flat Rate vs Progressive
Many people mistakenly think that if their property price crosses into a new band, they pay that band's rate on the entire purchase price. This is not how it works.
The Myth
Incorrect thinking: "If I buy at £250,001, I pay 5% on the entire amount (£12,500.05)."
Reality: You pay 0% on the first £125,000, 2% on the next £125,000, and 5% only on the remaining £1. Total: £0 + £2,500 + £0.05 = £2,500.05
This progressive system means there is never a "cliff edge" where paying £1 more suddenly costs you thousands in extra tax. You always pay proportionately more as the price increases, not dramatically more.
| Property Price | If Flat Rate (Wrong) | Actual Progressive (Correct) |
|---|---|---|
| £250,000 | £12,500 (5% of all) | £2,500 |
| £250,001 | £12,500.05 | £2,500.05 |
| £300,000 | £15,000 | £5,000 |
Understanding Effective Rate
The effective rate is the total tax divided by the property price. It's always lower than the highest band rate because lower portions of the price are taxed at lower rates.
In the example above, even though part of the price falls in the 5% band, the effective rate is only 2.5% because the first £125,000 is tax-free and the next £125,000 is only taxed at 2%.
Annexe, land or an old home not sold yet?
These are the purchases where a standard calculator can get your stamp duty wrong. Get it checked before you exchange.
How Higher Rates Stack
If you are subject to additional charges (additional property surcharge or non-resident surcharge), these stack on top of the base rates in each band.
Example: Non-UK Resident Buying Second Home
A non-UK resident buying a £400,000 buy-to-let property pays:
- Base rate: 0%
- + Additional property surcharge: 5%
- + Non-resident surcharge: 2%
- Combined: 7% = £8,750
- Base rate: 2%
- + Additional property surcharge: 5%
- + Non-resident surcharge: 2%
- Combined: 9% = £11,250
- Base rate: 5%
- + Additional property surcharge: 5%
- + Non-resident surcharge: 2%
- Combined: 12% = £18,000
These surcharges apply to each band individually, which is why the effective cost can be very high for certain buyer types.
Calculation for First-Time Buyers
First-time buyer rates differ from standard rates for properties up to £500,000:
| Band | FTB Rate | Standard Rate |
|---|---|---|
| £0 - £300,000 | 0% | 0% (£0-£125k), 2% (£125k-£250k), 5% (£250k-£300k) |
| £300,001 - £500,000 | 5% | 5% |
| Over £500,000 | No relief | Standard bands apply |
FTB Example: £400,000 Purchase
Additional Calculations
Additional Property Surcharge
For second homes and buy-to-let properties, add 5% to each band:
- £0 - £125,000: 5% (instead of 0%)
- £125,001 - £250,000: 7% (instead of 2%)
- £250,001 - £925,000: 10% (instead of 5%)
- £925,001 - £1,500,000: 15% (instead of 10%)
- Over £1,500,000: 17% (instead of 12%)
Example: a UK resident buying a £400,000 second home pays 5% on the first £125,000 (£6,250), 7% on the next £125,000 (£8,750) and 10% on the last £150,000 (£15,000). The total is £30,000, against £10,000 for a home mover at the same price.
Non-Resident Surcharge
Non-UK residents pay an additional 2% on top of all other rates. This stacks with the additional property surcharge if applicable, meaning non-residents buying second homes pay base rate + 5% + 2% in each band.
Joint Buyers: Whose Status Counts?
When two or more people buy together, the rate table is chosen for the whole purchase, not per person:
- First-time buyer relief applies only if every buyer is a first-time buyer. If one of you has owned a home before, anywhere in the world, standard rates apply to the whole price.
- The 5% surcharge applies if any buyer will own another home worth £40,000 or more at the end of the day of completion and is not replacing a main residence.
- Married couples and civil partners are treated as one unit, so a home owned by your spouse counts as yours even if you are buying alone.
See buying with a partner when only one of you is a first-time buyer for worked figures.
Commercial and Mixed-Use Property
Shops, offices, farmland and mixed-use property (such as a flat above a shop) use the non-residential table. The method is the same, but the bands are different and no surcharges apply:
| Band | Rate |
|---|---|
| £0 - £150,000 | 0% |
| £150,001 - £250,000 | 2% |
| Over £250,000 | 5% |
A £400,000 commercial purchase pays £0 + £2,000 + £7,500 = £9,500. Use the commercial stamp duty calculator or the mixed-use calculator for your own figure.
Scotland and Wales: Different Calculations
Scotland (LBTT) and Wales (LTT) have their own tax systems with different bands and thresholds. The calculation method is the same (tiered rates), but the specific rates and thresholds differ significantly. See the full 2026 stamp duty rate tables for complete details.
Scotland LBTT Bands
| Band | Rate |
|---|---|
| £0 - £145,000 | 0% |
| £145,001 - £250,000 | 2% |
| £250,001 - £325,000 | 5% |
| £325,001 - £750,000 | 10% |
| Over £750,000 | 12% |
Scotland's Additional Dwelling Supplement (ADS) is 8% (increased from 6% in December 2024) and applies as a flat surcharge on top of each band, similar to England's additional property surcharge.
Wales LTT Standard Bands
| Band | Standard Rate |
|---|---|
| £0 - £225,000 | 0% |
| £225,001 - £400,000 | 6% |
| £400,001 - £750,000 | 7.5% |
| £750,001 - £1,500,000 | 10% |
| Over £1,500,000 | 12% |
Wales LTT Higher Residential Bands (Additional Properties)
The Welsh higher rates are a separate table with their own thresholds, not the standard rates plus a surcharge. The band edges sit at different prices from the standard bands, so the two tables cannot be read side by side.
| Band | Higher Rate |
|---|---|
| £0 - £180,000 | 5% |
| £180,001 - £250,000 | 8.5% |
| £250,001 - £400,000 | 10% |
| £400,001 - £750,000 | 12.5% |
| £750,001 - £1,500,000 | 15% |
| Over £1,500,000 | 17% |
Unlike England and Scotland, Wales uses completely separate band structures for additional properties rather than adding a flat surcharge. The higher rates are significantly different from standard rates in each band. You can compare England and Scotland rates to see the differences.
The Same £300,000 Home in Each Nation
| Nation | How the price is sliced | Tax |
|---|---|---|
| England and NI (SDLT) | £125,000 at 0% + £125,000 at 2% + £50,000 at 5% | £5,000 |
| Scotland (LBTT) | £145,000 at 0% + £105,000 at 2% + £50,000 at 5% | £4,600 |
| Scotland, first-time buyer | £175,000 at 0% + £75,000 at 2% + £50,000 at 5% | £4,000 |
| Wales (LTT) | £225,000 at 0% + £75,000 at 6% | £4,500 |
Quick Reference
- Scotland nil-rate: £145,000 (£175,000 for FTB)
- Wales nil-rate: £225,000 (no FTB relief)
- Scotland ADS: 8% flat surcharge
- Wales higher rates: Separate band structure (not a flat surcharge)
Common Mistakes
- Applying one rate to the whole price: Remember, only the portion within each band is taxed at that rate
- Forgetting the surcharge: Additional properties always pay the 5% surcharge in England/NI
- FTB threshold confusion: Properties over £500,000 don't get any FTB relief at all
- Wrong region: Scotland and Wales have completely different rates and bands
- Ignoring non-resident surcharge: Non-UK residents pay an extra 2% on top of everything else
- Confusing effective and marginal rates: The highest band rate is not your total tax rate
Frequently Asked Questions About Stamp Duty Calculations
How do I work out stamp duty myself?
Take the price you are paying, pick the rate table for your buyer type and nation, split the price into the bands of that table, multiply each slice by its rate and add the results. On a £600,000 home in England a standard buyer pays £0 on the first £125,000, £2,500 on the next £125,000 and £17,500 on the last £350,000, a total of £20,000.
Is stamp duty calculated on the full price?
Yes, stamp duty is calculated on the full purchase price, but not at a single rate. Different portions of the price are taxed at different rates using a progressive band system. For example, on a £400,000 property, the first £125,000 is taxed at 0%, the next £125,000 at 2%, and the remaining £150,000 at 5%. The total is £10,000, which is 2.5% of the full price (the effective rate), even though the highest band rate used was 5%.
How do stamp duty bands work?
Stamp duty bands work like income tax bands. Each portion of the purchase price within a specific range (band) is taxed at that band's rate. The first £125,000 is tax-free (0%), the next £125,000 is taxed at 2%, the next £675,000 at 5%, and so on. You only pay the higher rate on the portion of the price that falls within that band, not on the whole price. This is why crossing into a new band doesn't cause a sudden jump in your total bill; it increases proportionately.
Why is stamp duty so high?
Stamp duty can seem high because property prices in the UK are high, especially in areas like London and the South East. Additionally, the April 2025 threshold reductions mean more of the purchase price is now taxable. For investment properties, the 5% additional property surcharge significantly increases the bill. For example, a £500,000 buy-to-let property costs £40,000 in stamp duty, more than double the £15,000 a homeowner would pay. Non-UK residents pay even more due to the 2% surcharge. The government uses stamp duty as a significant revenue source, raising billions annually.
Can I reduce my stamp duty bill?
Limited options exist to legally reduce stamp duty. First-time buyers should ensure they claim relief if eligible (properties up to £500,000). If buying a property with fixtures and fittings, you can agree a separate price for these items (furniture, carpets, curtains) which is not subject to stamp duty, but this must be genuine and documented. Splitting one deal into separate purchases does not help: purchases from the same seller that form one deal are linked transactions and are taxed on their combined price. Some buyers consider purchasing through a company, but this rarely saves on stamp duty alone and has other tax implications. Avoid tax avoidance schemes; HMRC actively challenges these.
Does stamp duty apply to the deposit or full price?
Stamp duty is calculated on the full purchase price of the property, not just the deposit or the amount you are borrowing via a mortgage. For example, if you buy a £300,000 property with a £30,000 deposit and a £270,000 mortgage, stamp duty is calculated on the full £300,000. This catches many first-time buyers by surprise, as they need to budget for stamp duty on top of their deposit and other fees. Stamp duty must be paid within 14 days of completion, so ensure you have the full amount available in addition to your deposit.
Reviewed by
Julie White
ACAStamp duty specialist since 1999Stamp Duty Land Tax Specialist
ACA and Tax Adviser with a career spanning nearly four decades, specialising in stamp duty planning and advisory work since 1999.