Question 1

What is stamp duty?

Accepted Answer

Stamp duty is a tax you pay when buying property or land in the UK. England and Northern Ireland use Stamp Duty Land Tax (SDLT), Scotland uses Land and Buildings Transaction Tax (LBTT), and Wales uses Land Transaction Tax (LTT). The buyer pays it within 14 days of completion, usually through a solicitor.

Question 2

How is stamp duty calculated?

Accepted Answer

Stamp duty uses a tiered system where different portions of the price are taxed at different rates. You never pay the top rate on the whole amount: the first slice is tax-free, the next slice is taxed at a lower rate, and only the portion above each threshold pays the next rate up. It works like income tax bands.

Question 3

Who pays stamp duty, buyer or seller?

Accepted Answer

The buyer always pays stamp duty. Sellers have no stamp duty obligations at all. Even if your solicitor handles the payment from the completion funds, you remain legally liable for ensuring it is paid within 14 days of completion.

Question 4

When do I pay stamp duty?

Accepted Answer

Stamp duty must be paid within 14 days of completion. Your solicitor typically handles this automatically using funds from the transaction. Missing the deadline triggers an automatic £100 HMRC penalty plus interest at 7.75% per annum.

Question 5

What is SDLT?

Accepted Answer

SDLT stands for Stamp Duty Land Tax, the property transfer tax used in England and Northern Ireland. It applies to residential, commercial, and mixed-use purchases above set thresholds. Rates range from 0% to 12% on residential property, with surcharges for second homes and non-UK residents.

Question 6

What is LBTT?

Accepted Answer

LBTT stands for Land and Buildings Transaction Tax, Scotland's version of stamp duty since April 2015. It has a higher nil-rate threshold of £145,000 and an 8% Additional Dwelling Supplement on second homes, which is higher than England's 5% surcharge.

Question 7

What is LTT?

Accepted Answer

LTT stands for Land Transaction Tax, the Welsh equivalent of stamp duty since April 2018. It has the highest nil-rate threshold in the UK at £225,000 but no first-time buyer relief, and uses separate band structures for additional properties rather than a flat surcharge.

Question 8

What is the stamp duty threshold?

Accepted Answer

The England and Northern Ireland nil-rate threshold is £125,000 for standard buyers (£300,000 for first-time buyers). Scotland's LBTT threshold is £145,000. Wales's LTT threshold is £225,000. Purchases below these amounts pay no stamp duty at all.

Question 9

Am I a first-time buyer for stamp duty?

Accepted Answer

You qualify as a first-time buyer if you have never owned a freehold or leasehold residential property anywhere in the world. This includes inherited properties, overseas properties, and property owned as a minor. For joint purchases, every buyer must qualify individually.

Question 10

How much stamp duty do first-time buyers pay?

Accepted Answer

First-time buyers pay 0% on the first £300,000 and 5% on the portion between £300,001 and £500,000. Properties above £500,000 get no first-time buyer relief and pay standard rates on the whole price. The maximum saving is £6,250.

Question 11

Can I claim FTB relief if my partner has owned before?

Accepted Answer

No. If either buyer has ever owned residential property anywhere in the world, neither qualifies for first-time buyer relief. You both pay standard rates on the whole purchase price. Gifted deposits from non-owning family members do not disqualify you.

Question 12

Does inheriting property stop me being a first-time buyer?

Accepted Answer

Yes. Inheriting any share of residential property, including an unwanted share of a family home, permanently disqualifies you from first-time buyer relief. The disqualification applies regardless of whether you still own the inherited property at the time of your purchase.

Question 13

Is there first-time buyer relief in Scotland or Wales?

Accepted Answer

Scotland offers limited FTB relief raising the nil-rate threshold to £175,000, saving up to £600. Wales has no dedicated first-time buyer relief but already offers the UK's most generous standard nil-rate threshold at £225,000 for all buyers.

Question 14

Do I pay second home stamp duty?

Accepted Answer

If you own two or more properties after completion, you pay an additional 5% surcharge on top of standard rates on the whole purchase price. This applies to buy-to-let, holiday homes, inherited shares over 50%, and any residential property worth over £40,000.

Question 15

How much is the second home surcharge?

Accepted Answer

The additional property surcharge is 5% in England and Northern Ireland (increased from 3% in April 2025), 8% in Scotland (ADS, increased from 6% in December 2024), and a separate higher band structure in Wales starting at 5% rather than a flat surcharge.

Question 16

Can I claim a stamp duty refund?

Accepted Answer

Yes. If you paid the 5% surcharge because your old home had not yet sold, you can claim a refund if you sell it within 36 months of completion (18 months in Scotland). Refunds are claimed from HMRC using form SDLT16 and usually paid within 30 days.

Question 17

Does the surcharge apply if I am replacing my main home?

Accepted Answer

If you complete the sale of your old main residence before buying the new one, no surcharge applies. If timings overlap, you pay the surcharge upfront then reclaim it once the old property sells within 36 months.

Question 18

Do married couples pay more stamp duty?

Accepted Answer

Married couples and civil partners are treated as a single unit for stamp duty. If one spouse owns property anywhere in the world, both pay the 5% additional surcharge on any new purchase, even if only one partner's name is on the new deed.

Question 19

Does an inherited property share trigger the surcharge?

Accepted Answer

Inherited property shares of 50% or less are ignored for stamp duty purposes for 36 months after inheritance. Shares above 50% count as owning the whole property and will trigger the 5% surcharge on any subsequent purchase.

Question 20

What is Multiple Dwellings Relief?

Accepted Answer

Multiple Dwellings Relief (MDR) allowed buyers of two or more dwellings in a single transaction to calculate stamp duty on the average price per dwelling. HMRC abolished MDR for transactions completing on or after 1 June 2024, though some transitional cases still apply.

Question 21

Does shared ownership reduce stamp duty?

Accepted Answer

Shared ownership can reduce upfront stamp duty significantly. You choose between two SDLT options: pay on your initial share only (typically 25–75% of market value) or pay on the full market value upfront. The share-only option is cheaper if you never staircase to 100%.

Question 22

How can I legally reduce or avoid stamp duty?

Accepted Answer

Legitimate ways to reduce stamp duty include claiming first-time buyer relief, buying below the nil-rate threshold, negotiating chattels separately, timing completion to avoid the surcharge, buying mixed-use property, or transferring between spouses. Avoid schemes HMRC treats as tax avoidance.

Question 23

How do I claim a stamp duty refund?

Accepted Answer

Claim a stamp duty refund by submitting an amended SDLT return to HMRC using form SDLT16, usually via your solicitor. The 36-month deadline for additional property surcharge refunds runs from completion of the new purchase, not the sale of the old property.

Question 24

Do I pay stamp duty on a new build?

Accepted Answer

Yes, new builds are charged stamp duty at the same rates as resale properties, based on the purchase price. First-time buyer relief and the 5% surcharge both apply normally. Incentives like deposit contributions or stamp duty payment by the developer do not change the chargeable amount.

Question 25

Is stamp duty the same in Scotland and England?

Accepted Answer

No. Scotland uses LBTT with a higher £145,000 nil-rate threshold but higher rates above it, and an 8% Additional Dwelling Supplement on second homes versus England's 5%. Scotland's first-time buyer relief is also less generous than England's.

Question 26

Is stamp duty different in Wales?

Accepted Answer

Yes. Wales uses LTT with the UK's highest nil-rate threshold at £225,000, but rates above the threshold are steeper than England and there is no first-time buyer relief. Additional properties use separate higher band structures rather than a flat surcharge.

Question 27

Is stamp duty different in Northern Ireland?

Accepted Answer

No. Northern Ireland uses the same SDLT system as England, administered by HMRC with identical rates, thresholds, surcharges, and reliefs. First-time buyer relief, the 5% additional property surcharge, and the 2% non-resident surcharge all apply equally.

Question 28

Which UK nation has the lowest stamp duty?

Accepted Answer

For lower-priced properties, Wales wins with the £225,000 nil-rate threshold. For first-time buyers under £500,000, England wins with the £300,000 relief threshold. Scotland's rates are highest for additional properties due to the 8% ADS surcharge.

Question 29

Is it cheaper to buy through a company?

Accepted Answer

No. Companies pay significantly more stamp duty upfront, including the 5% additional property surcharge and a flat 17% rate on residential purchases over £500,000. For large portfolios, corporation tax savings can eventually offset the higher upfront cost, but most single purchases are cheaper personally.

Question 30

Is commercial stamp duty cheaper?

Accepted Answer

Yes. Commercial and mixed-use rates top out at 5% compared to 12% for residential, and avoid the 5% additional property surcharge entirely. A property with any genuine commercial element (such as a flat above a shop) can qualify for the lower non-residential rates.

Question 31

Do non-UK residents pay more stamp duty?

Accepted Answer

Yes. Non-UK residents pay an additional 2% surcharge on top of all other rates, including standard rates and the 5% additional property surcharge. The test is based on days spent in the UK in the 12 months before completion, not immigration status.

Question 32

Does inheritance affect stamp duty?

Accepted Answer

You pay no stamp duty when inheriting property. However, the inherited property may count as a second home and trigger the 5% surcharge on any future purchase, unless you own 50% or less of the inherited share and dispose of it within 36 months.

Question 33

Does divorce trigger stamp duty?

Accepted Answer

Property transfers between spouses as part of a court-ordered divorce settlement are exempt from stamp duty. Transfers outside a formal settlement, or between unmarried partners splitting up, may trigger stamp duty on any consideration paid, including mortgage assumption.

Question 34

Do I pay stamp duty on an auction property?

Accepted Answer

Yes, auction purchases are charged stamp duty at the same rates as any other purchase, based on the hammer price plus buyer's premium. The 14-day payment deadline runs from completion (usually 28 days after the auction), so budget for stamp duty alongside the 10% deposit at the fall of the hammer.

Question 35

How do I actually pay stamp duty?

Accepted Answer

Your solicitor submits an SDLT1 return to HMRC and pays the tax on your behalf within 14 days of completion, using funds you transferred to them before completion day. You receive an SDLT5 certificate which Land Registry requires to register the title change.

Question 36

Can stamp duty be added to a mortgage?

Accepted Answer

Yes, most UK lenders allow stamp duty to be added to the mortgage if your loan-to-value limit permits. The downside is paying interest on the stamp duty for the full mortgage term. A £12,500 bill on a 25-year mortgage at 4.5% adds roughly £8,400 in interest.

Question 37

What happens if I do not pay stamp duty?

Accepted Answer

HMRC charges an automatic £100 penalty after 14 days, rising to 100% of the tax owed for payments over 12 months late, plus interest at 7.75% per annum. You cannot register the title with Land Registry without the SDLT5 certificate, effectively blocking ownership.

Question 38

Can my parents pay my stamp duty?

Accepted Answer

Yes. Parents can gift money to cover stamp duty without affecting first-time buyer relief, as long as they are not added to the deed. If parents go on the deed and already own property, you both lose FTB relief and pay the 5% surcharge.

Question 39

Can I pay stamp duty in instalments?

Accepted Answer

No. Stamp duty must be paid in full within 14 days of completion. Only Time to Pay arrangements with HMRC allow delayed payment, and those are reserved for genuine hardship cases and accrue interest. Most buyers add stamp duty to their mortgage if they cannot pay upfront.

Question 40

Will stamp duty go down?

Accepted Answer

No rate cuts are announced for 2026. Current rates set in April 2025 are expected to remain stable absent a major economic intervention. HMRC collects over £15 billion annually from stamp duty, making significant reductions politically unlikely in the short term.

Question 41

Should I wait for stamp duty changes?

Accepted Answer

For most buyers, waiting is financially counterproductive. UK house price growth of around 4.7% a year typically exceeds any realistic stamp duty saving, and mortgage rates plus ongoing rent costs compound the opportunity cost. Waiting rarely pays unless a specific change is already announced.

Question 42

How long does it take to save for stamp duty?

Accepted Answer

At the UK median savings rate of £500 per month, the average stamp duty bill of £8,400 takes about 17 months to save. First-time buyers often pay nothing thanks to the £300,000 nil-rate threshold, making stamp duty less of a blocker than deposit size.

Question 43

Should I prioritise saving for deposit or stamp duty?

Accepted Answer

Always prioritise the deposit. A larger deposit unlocks better mortgage rates and lifetime interest savings that far exceed stamp duty costs. Most first-time buyers owe no stamp duty under £300,000, so the deposit gap is the real obstacle to completion.

Question 44

How do I budget for stamp duty?

Accepted Answer

Calculate your liability using a stamp duty calculator before making offers, then set aside the full amount in a separate savings account at least two months before exchange. Include it in your mortgage affordability calculation alongside deposit, legal fees, and moving costs.

Stamp Duty Questions Answered

The Basics