Stamp Duty Land Tax (SDLT) is one of the largest upfront costs in any property transaction. With the temporary reliefs introduced during the pandemic now wound down, and further threshold changes taking effect in 2025, both buyers and sellers need a clear understanding of how stamp duty will affect their transaction.
2025 stamp duty thresholds
From 1 April 2025, the stamp duty thresholds reverted to their pre-September 2022 levels following the end of the temporary relief period. Here's what buyers now pay:
| Property value (residential) | 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% |
Stamp duty is applied on a marginal basis — like income tax, you only pay each rate on the portion of the price that falls within that band, not on the entire purchase price.
💡 Example: On a £300,000 purchase — £0 on the first £125,000, £2,500 on the next £125,000 (2%), and £2,500 on the final £50,000 (5%) = £5,000 total SDLT.
First-time buyer relief
First-time buyers benefit from relief on purchases up to £625,000. No stamp duty is payable on the first £425,000 of the purchase price. The 5% rate then applies on the portion between £425,001 and £625,000. Above £625,000, no first-time buyer relief applies and standard rates are used throughout.
To qualify, the buyer (and any joint buyer) must never have owned a residential property anywhere in the world, including properties inherited or received as gifts.
Additional property surcharge
If you are purchasing a second residential property — including a buy-to-let or holiday home — while still owning another, a 3% surcharge applies on top of the standard rates across all bands. This applies even if you intend to sell your main home: if there's any period where you own two properties simultaneously, the surcharge applies (though it can be reclaimed if you sell the original property within 36 months).
What this means if you're selling
Sellers don't pay stamp duty — it's purely a buyer's cost. However, stamp duty significantly affects buyer affordability and therefore the pool of people who can purchase your property. A buyer purchasing at £300,000 now needs to find an additional £5,000 above their deposit and conveyancing costs. This is worth factoring into how you price and how you handle negotiation.
In a competitive market, some sellers choose to factor stamp duty into negotiation discussions — for example, accepting a slightly lower offer to help a buyer manage their total upfront costs.
How to calculate your stamp duty
The government provides an official stamp duty calculator at gov.uk. Your conveyancing solicitor will also calculate and arrange payment of SDLT on your behalf as part of the completion process.
Stamp duty must be paid within 14 days of completion. Failure to pay on time results in interest and penalties. Your solicitor will handle this as part of the conveyancing process, but ensure the funds are available and earmarked.
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