Stamp Duty Land Tax in 2026: what buyers, landlords and trusts pay now

Stamp Duty Land Tax is the tax that turns a completion statement sour. It applies to purchases of land and buildings in England and Northern Ireland, it is paid by the buyer, and since April 2025 it starts £125,000 lower down than many people still assume. Scotland and Wales run their own versions, Land and Buildings Transaction Tax and Land Transaction Tax, with different rates and thresholds, so everything below is about England and Northern Ireland only.

Two dates explain the current landscape. On 31 October 2024 the surcharge on additional homes rose from 3% to 5%, and the flat rate for companies buying expensive homes rose from 15% to 17%. Then on 1 April 2025 the temporary thresholds that had applied since 2022 expired, so the nil rate band fell from £250,000 back to £125,000 and first time buyer relief tightened. The Autumn Budget in November 2025 left the rates untouched, so this is the regime buyers are living with now.

How the bands work

SDLT is charged in slices, like income tax. Each portion of the price is taxed at its own rate, so moving £1 over a threshold changes the tax on that £1 only, not on the whole price. The one place that logic breaks is first time buyer relief, which has a real cliff edge that we come to below.

First time buyer relief and its cliff edge

A first time buyer pays nothing on the first £300,000 and 5% on the portion from £300,001 to £500,000, provided everyone buying has never owned a residential property anywhere in the world and the home will be their main residence. At £425,000 that is £6,250, against £11,250 at the standard rates, a saving of £5,000.

The trap is the £500,000 ceiling. It is not a threshold within the calculation, it is a condition of the relief itself. Pay even £1 more than £500,000 and the relief disappears entirely, with the whole purchase taxed at the standard rates.

Buying jointly can also forfeit the relief silently. If one buyer has owned before, even a share in an inherited flat abroad, nobody on the purchase qualifies. And a first time buyer of a shared ownership home has choices to make about how SDLT is calculated that are worth taking advice on before, not after, reservation.

The 5% surcharge on additional homes

Buy a residential property when you already own one, anywhere in the world, and 5% is added to every band, including the part below £125,000. Since 31 October 2024 this has been the single biggest cost surprise in residential purchases. A £400,000 buy to let now carries £30,000 of SDLT where a home mover would pay £10,000. The surcharge does not apply to purchases below £40,000, and a purchase at that level generally needs no SDLT return at all.

The important exception is replacing your main residence. Sell your old main home and buy the new one, and the surcharge does not apply even if you own other properties. If completion dates cross and you briefly own two homes, you pay the higher rates up front but can reclaim the extra 5% if the old main residence is sold within 36 months. The refund claim must then be made within 12 months of that sale, or within 12 months of the filing date of the purchase return if that is later. Couples are treated as one unit for these rules, and a property owned by either of them counts.

The 2% non resident surcharge

A buyer who has spent fewer than 183 days in the UK during the 12 months before completion is treated as non resident for SDLT and pays a further 2% across every band. It stacks with everything else, so a non resident buying an additional property pays both surcharges: the £400,000 rental above would cost £38,000. There is a route back, because a buyer who then spends 183 days in the UK within a continuous 365 day window around the purchase can reclaim the 2%.

Buying residential property through a company

A company always pays the 5% surcharge on a residential purchase, even its first. On top of that sits a punitive flat rate: where a company, a partnership with a corporate member or a collective investment scheme buys a single dwelling for more than £500,000, SDLT can be charged at a flat 17% of the whole price, not in slices. That rate rose from 15% on 31 October 2024.

Relief from the flat rate is available where the property is bought for a qualifying business use, most commonly letting to unconnected tenants on commercial terms, or property development or trading. A qualifying purchase then falls back to the banded higher rates instead. The flat rate is aimed at homes enveloped in companies for private use, and where it applies the Annual Tax on Enveloped Dwellings usually follows it year after year, so the SDLT bill is only the start.

Incorporating an existing rental portfolio triggers SDLT on the market value of the properties moved in, which is one of the two taxes, alongside capital gains, that decide whether incorporation makes sense at all. That calculation deserves proper modelling before anything is signed.

Charities relief, including academy trusts

A charity buying land to hold for charitable purposes can claim charities relief and pay no SDLT at all. That includes academy trusts, which are charities, when they acquire sites, playing fields or buildings for their schools. The relief has conditions with teeth: it can be clawed back if, broadly within three years, the purchaser stops being a charity or the land is held or used for something other than qualifying charitable purposes, and only partial relief is available where a charity buys jointly with a non charity.

The 14 day deadline and getting money back

The SDLT return must be filed and the tax paid within 14 days of completion. In practice the conveyancer does it, but the legal responsibility sits with the buyer, and late filing brings automatic penalties with interest on late payment. Purchases below £40,000 generally need no return.

Refunds flow the other way more often than people expect. The commonest is the higher rates refund when an old main residence sells within 36 months. Overpayments also arise from misclassification, from missed reliefs and from prices adjusted after completion. Amendments can be made within 12 months of the filing date, and beyond that a claim for overpaid tax is possible within four years, so a purchase that felt wrong at the time is often still fixable.

Finally, on what is coming. The last Budget considered wholesale reform and did not do it, so the rates above stand. What it did introduce, from April 2028, is a separate council tax surcharge on homes worth over £2 million, between £2,500 and £7,500 a year. That is an annual charge collected through council tax, not a transaction tax, but for buyers at that level it now belongs in the same conversation as the SDLT on the way in.

Estimate the SDLT on a purchase