What Is Stamp Duty Land Tax?

Q: Does SDLT apply in Scotland and Wales?

No. Scotland replaced SDLT with Land and Buildings Transaction Tax (LBTT) from April 2015, and Wales introduced Land Transaction Tax (LTT) from April 2018. SDLT only applies in England and Northern Ireland.

Key facts

SDLT applies to property and land purchases in England and Northern Ireland above £125,000.
The tax is calculated on a progressive “slice” basis — you only pay the higher rate on the portion above each threshold.
From 1 April 2025, the nil-rate band for residential property reverts to £125,000 (down from £250,000).
SDLT must be filed and paid within 14 days of completion.
Scotland has its own Land and Buildings Transaction Tax (LBTT); Wales has Land Transaction Tax (LTT).

How Stamp Duty Land Tax Works When You Buy Property

Stamp Duty Land Tax (SDLT) is a tax levied on the purchase of property and land in England and Northern Ireland. It was introduced on 1 December 2003, replacing the old stamp duty on property transactions.^[1]

SDLT is charged on the chargeable consideration — usually the purchase price — and is calculated on a progressive “slice” basis. This means you only pay the higher rates on the portion of the price that falls within each band, similar to how Income Tax works.^[2]

Key point: SDLT does not apply in Scotland (which uses LBTT) or Wales (which uses LTT). If you are buying property in Scotland or Wales, different rules and rates apply.

How SDLT Works: The Slice System

Unlike the old stamp duty system that applied a single percentage to the entire purchase price, SDLT uses a progressive slice system. Each portion of the purchase price is taxed at its own rate:^[1]

Price Band	SDLT Rate
Up to £125,000	0%
£125,001 – £250,000	2%
£250,001 – £925,000	5%
£925,001 – £1,500,000	10%
Over £1,500,000	12%

These are the standard residential rates from 1 April 2025. Between 23 September 2022 and 31 March 2025, a temporary nil-rate band of £250,000 applied.

Worked Example

You buy a house for £350,000. Your SDLT is calculated as follows:

Slice	Amount	Rate	SDLT
Up to £125,000	£125,000	0%	£0
£125,001 – £250,000	£125,000	2%	£2,500
£250,001 – £350,000	£100,000	5%	£5,000
Total SDLT			£7,500

What SDLT Applies To

SDLT is charged on the acquisition of a chargeable interest in land or property in England and Northern Ireland. This includes:^[3]

Buying a freehold property (houses, flats, commercial buildings)
Buying an existing leasehold
Being granted a new lease
Transferring land or property in exchange for any chargeable consideration
Buying a property through a shared ownership scheme

What SDLT Does Not Apply To

Certain transactions are exempt from SDLT or fall outside its scope:^[1]

Property inherited through a will or intestacy
Property transferred as a gift with no consideration (though the higher-rate surcharge may still apply if a mortgage is assumed)
Transfers by way of court order on divorce or dissolution of a civil partnership
Transactions where the consideration is below the nil-rate threshold
Property in Scotland (subject to LBTT) or Wales (subject to LTT)

Tip: Even where no SDLT is payable, you may still need to file an SDLT return within 14 days if the purchase price exceeds £40,000. Your solicitor or conveyancer will normally handle this.

Residential vs Commercial Property

SDLT has different rate structures for residential and non-residential (commercial) property:^[2]

Residential property — houses, flats, and any building used or suitable for use as a dwelling. Higher SDLT rates apply, including potential surcharges for additional properties and non-residents.
Non-residential (commercial) property — shops, offices, agricultural land, forests, and any property that is not a dwelling. Lower SDLT rates apply.
Mixed-use property — property with both residential and commercial elements (e.g. a flat above a shop) is taxed at the lower commercial rates.

Additional Surcharges

On top of the standard residential rates, two surcharges may apply:

Surcharge	Rate	When It Applies
Higher rates for additional dwellings	+5%	Buying a second home, buy-to-let, or purchase by a company (from 31 October 2024)
Non-resident surcharge	+2%	Purchases by non-UK residents (from 1 April 2021)

Both surcharges are added on top of the standard rates on every slice. A non-UK resident buying a second home could face a combined surcharge of 7% above the standard rates.

Filing and Paying SDLT

SDLT must be filed and paid within 14 days of the effective date of the transaction (usually the date of completion). In practice:^[1]

Your solicitor or conveyancer normally files the SDLT return and pays the tax on your behalf
Filing is done electronically through HMRC’s online system
HMRC issues an SDLT5 certificate once the return is processed — this is needed for the Land Registry to register the property in your name
Late filing attracts an automatic £100 penalty, increasing for longer delays, plus interest on any unpaid tax

Frequently Asked Questions

What is Stamp Duty Land Tax in simple terms?

SDLT is a tax you pay to HMRC when you buy a property or piece of land in England or Northern Ireland. The amount depends on the purchase price and whether the property is residential or commercial. You pay more on higher-value properties, calculated in slices like Income Tax bands.

Do I pay SDLT on every property purchase?

Not necessarily. If the purchase price is below the nil-rate threshold (£125,000 for residential property from 1 April 2025), no SDLT is due. First-time buyers may also benefit from a higher threshold. Some transfers — such as property inherited through a will — are exempt.

Is SDLT the same as stamp duty?

SDLT replaced the old “stamp duty” on property in December 2003. The terms are often used interchangeably in everyday language, but SDLT is the correct name for the tax on land and property. Stamp Duty still exists separately as a 0.5% tax on share transactions.

Does SDLT apply in Scotland and Wales?

No. Scotland replaced SDLT with Land and Buildings Transaction Tax (LBTT) from April 2015, and Wales introduced Land Transaction Tax (LTT) from April 2018. SDLT only applies in England and Northern Ireland.

Sources

Stamp Duty Land Tax — GOV.UK
Stamp Duty Land Tax: Overview — GOV.UK
SDLTM00100 – Scope of Stamp Duty Land Tax — HMRC