Stamp Duty Guide

The latest Stamp Duty Land Tax (SDLT) announcements made in the mini-budget of September 2022 are applicable till March 2025 and outline how much SDLT homebuyers need to pay HMRC for property purchases in London. Here’s a quick guide to SDLT in London

What is SDLT?

Stamp Duty is a tax you might need to pay when buying a residential property in England and Northern Ireland if the price is above a certain threshold.

For most buyers, SDLT is payable on properties costing more than £250,000 unless you are a first-time buyer and qualify for relief. First-time buyers pay no Stamp Duty on properties worth up to £425,000 and get a reduced rate on homes priced between £425,001 and £625,000.

This tax applies whether you’re buying a freehold or leasehold property and whether you’re paying in full or using a mortgage.

How much SDLT do I need to pay?

Stamp Duty is calculated in bands, with different rates applied to portions of the property’s price.

You’ll only pay SDLT on the part of the price that exceeds £250,000 unless you’re a first-time buyer.

Example:

If you buy a house for £370,000, your SDLT will be calculated like this:

  • 0% on the first £250,000 = £0
  • 5% on the amount between £250,001 and £370,000 = £6,250
  • Total SDLT = £6,250

SDLT rates:

Property Price SDLT Rate
£0 - £250,000 0%
£250,001 - £925,000 5%
£925,001 - £1.5 million 10%
Over £1.5 million 12%

SDLT relief for first-time buyers

If you’re a first-time buyer in the UK and don't own any other property anywhere in the world, you won’t pay Stamp Duty on properties worth up to £425,000. For properties between £425,001 and £625,000, the first £425,000 is exempt, and you’ll pay 5% on the remaining amount. For homes over £625,000, standard rates apply, and you won’t qualify for first-time buyer relief.

SDLT for non-resident buyers

Non-UK residents, including Indians, may need to pay an additional 2% on top of the regular SDLT rates for properties costing more than £40,000.

When does SDLT need to be paid?

You have 14 days from completing your property purchase to file a Stamp Duty return and pay any SDLT due. If you miss the deadline, HMRC may charge interest and penalties.

How do I pay Stamp Duty?

Your solicitor usually handles the SDLT return and payment, but you can submit it yourself if needed. Ultimately, it’s your responsibility to ensure everything is done on time. Even if no SDLT is due, you still need to file a return (unless you're exempt).

What are the exemptions for SDLT?

There are some situations where you don’t have to pay SDLT, such as:

  • Property transfers due to a court order during divorce or separation are usually exempt.
  • Inheriting a property through a will generally doesn’t require SDLT, as long as no other payments are made.
  • Gifting a property without a mortgage doesn’t incur SDLT, but if the recipient takes on a mortgage, SDLT may be due on the mortgage amount above the relevant threshold.