SDLT worked examples: 2026/27
Stamp Duty (SDLT) 2026/27: Worked Examples Post-April-2025 Reform
Complete guide to Stamp Duty Land Tax in 2026/27 after the April 2025 reform reverted the temporary 2022 thresholds. Standard nil-rate band cut £250k→£125k, first-time buyer threshold cut £425k→£300k, FTB max property £625k→£500k. Higher Rate for Additional Dwellings (second-home / BTL) surcharge raised 3%→5% from 31 October 2024. 9 worked scenarios across buyer types: FTB modest / mid / premium-loses-relief, mover at 3 price points, second home, non-resident mover, non-resident second-home (double surcharge).
April 2025 SDLT reform - what changed
| Threshold | Sept 2022 - Mar 2025 | From April 2025 | Effect |
|---|---|---|---|
| Standard nil-rate band | £250,000 | £125,000 | £2,500 more SDLT on £250k+ mover purchases |
| FTB nil-rate band | £425,000 | £300,000 | £6,250 more SDLT on £425k FTB |
| FTB max property value | £625,000 | £500,000 | FTB relief totally LOST above £500k |
| 2nd-home surcharge (Oct 2024) | 3% | 5% | +£8,000 on £400k second home |
| Non-resident surcharge | 2% | 2% | Unchanged |
2026/27 SDLT rate tables (England + NI)
Standard residential (mover)
| Band | Rate |
|---|---|
| £0 - £125,000 | 0% |
| £125,001 - £250,000 | 2% |
| £250,001 - £925,000 | 5% |
| £925,001 - £1,500,000 | 10% |
| Above £1,500,000 | 12% |
First-time buyer relief (under £500k only)
| Band | Rate |
|---|---|
| £0 - £300,000 | 0% |
| £300,001 - £500,000 | 5% |
| Above £500k: FTB relief LOST entirely - full standard rates apply | |
Plus 5% second-home surcharge or 2% non-resident surcharge where applicable, applied to the entire purchase price.
9 worked SDLT scenarios
| Buyer scenario | Price | SDLT | As % of price |
|---|---|---|---|
| FTB, modest flat Below £300k FTB threshold - zero SDLT. | £220,000 | £0 | 0.00% |
| FTB, mid-range £300-500k FTB band at 5% = £2,500. | £350,000 | £2,500 | 0.71% |
| FTB, premium (loses relief) Above £500k FTB cap - relief LOST entirely, full standard rates apply. | £550,000 | £17,500 | 3.18% |
| Mover, mid-range Standard rates: 0% to £125k, 2% £125-250k, 5% above. | £350,000 | £7,500 | 2.14% |
| Mover, premium Standard rates with £25k of 5% band used. | £750,000 | £27,500 | 3.67% |
| Mover, luxury Three bands engaged; 10% on top portion. | £1,500,000 | £93,750 | 6.25% |
| Second home, modest 5% surcharge on full price (raised from 3% in Oct 2024). | £350,000 | £25,000 | 7.14% |
| Non-resident, mover 2% non-resident surcharge on full price. | £500,000 | £25,000 | 5.00% |
| Non-resident, second home 5% second-home + 2% non-resident = 7% combined surcharge. | £500,000 | £50,000 | 10.00% |
The £500,000 FTB relief cliff
The single most punitive change in the April 2025 SDLT reform: first-time buyer relief is LOST entirely if the property price exceeds £500,000. There's no smooth taper - a £499,999 FTB purchase gets full relief (£9,950 SDLT), but a £500,001 FTB purchase reverts to full standard rates (£12,500 SDLT) - a £2,550 jump for £2 of extra property value.
The previous £625,000 cap allowed FTB relief on properties up to that level (with relief gradually reducing as the price increased into the relief-zone). The April 2025 reform replaced this with a hard cliff at £500,000. Combined with the lower £300,000 FTB threshold, FTBs on properties between £500k and £625k face the steepest SDLT increase - between £11,250 and £18,750 more than under the previous regime. This particularly impacts London and South-East FTBs where £500k+ properties are common entry-level homes.
Higher Rate for Additional Dwellings - the 5% surcharge
Raised from 3% to 5% from 31 October 2024 (Autumn Budget 2024). Applies to buy-to-let, second homes, holiday lets, investment properties. The 5% surcharge is on the ENTIRE purchase price, not just the slice above £250k - so a £300,000 BTL incurs £15,000 of surcharge alone, plus £5,000 of standard rates = £20,000 total SDLT.
Refund mechanism: if buying a new main home before selling the old one, you pay the 5% surcharge at completion (because you owned 2 residential properties on completion day), then claim a refund via HMRC's online service if you sell the previous main home within 3 years. Time limit is hard - sell at month 36 + 1 day = surcharge permanently forfeited. Refund must be claimed within 12 months of selling the previous home or 12 months of the SDLT return filing deadline, whichever is later.
Frequently asked questions
What are the SDLT rates for 2026/27?
Five standard rate bands for residential property purchases by UK-resident main-home buyers: 0% on first £125,000, 2% on £125,001-£250,000, 5% on £250,001-£925,000, 10% on £925,001-£1,500,000, 12% above £1,500,000. These are the rates that took effect 1 April 2025 (the temporary £250k nil-rate band introduced in September 2022 expired). First-time buyer relief gives 0% on the first £300,000 with 5% on the £300,000-£500,000 portion, but relief is LOST entirely if the property price exceeds £500,000 (the temporary £425k / £625k FTB thresholds also expired 31 March 2025). Higher Rates for Additional Dwellings (second home, BTL): standard rates PLUS 5% surcharge on the entire purchase price (raised from 3% on 31 October 2024). Non-resident buyers pay an additional 2% surcharge on top.
What changed about SDLT in April 2025?
Three changes effective 1 April 2025 (Finance Act 2024, after the post-Liz-Truss 2022 temporary cuts expired): (1) Standard nil-rate band cut £250,000 → £125,000: previously the first £250k was tax-free for movers, now only the first £125k is. A typical £300k mover purchase went from £2,500 SDLT to £5,000. (2) First-time buyer threshold cut £425,000 → £300,000: FTBs now pay 5% on the £300-500k slice instead of getting £425k tax-free. A FTB on a £400k home went from £0 SDLT to £5,000. (3) FTB relief maximum price cut £625,000 → £500,000: above £500k, FTB relief is LOST entirely (you pay standard rates as if you weren't a FTB). A FTB on a £550k home went from £6,250 to £17,500 SDLT - the biggest single-transaction tax rise in the package. Separately, the 5% second-home surcharge (up from 3%) took effect 31 October 2024. These changes were part of Labour's first Autumn Budget under Reeves and were not reversed.
When does the higher 5% surcharge for second homes apply?
When you're buying a residential property AND you'll own 2 or more residential properties at the end of the day of completion AND it's not replacing your main home (Section 75A and Schedule 4ZA Finance Act 2003). Covers: buy-to-let purchases, holiday homes, second homes, investment properties, any additional residential property. The 5% surcharge applies to the FULL purchase price (not just the slice above £250k) - so a £300,000 BTL incurs £15,000 of surcharge alone, plus standard rates. There's a 3-year replacement rule: if you buy a new main home BEFORE selling your old one, you pay the surcharge, but you can claim it back if you sell the previous main home within 3 years (Schedule 4ZA para 8). The surcharge does NOT apply to: properties under £40,000, mixed-use property (commercial + residential), certain inherited transfers, properties bought by housing companies subject to ATED (Annual Tax on Enveloped Dwellings).
Who counts as a first-time buyer for SDLT?
Strict definition (Schedule 6ZA Finance Act 2003): never owned a residential property anywhere in the world. Owned a small share via a divorce settlement = not a FTB. Inherited a 50% share of grandparent's home = not a FTB. Owned property abroad = not a FTB. Owned but sold it = not a FTB anymore. The relief is per-purchase, not per-person - if you buy with a partner, BOTH must be first-time buyers AND both must intend to occupy the property as their main home. One non-FTB partner = no FTB relief on the joint purchase. Special exception for shared ownership: FTBs buying through approved shared-ownership schemes can claim relief on the purchase of the initial share OR on staircasing-up purchases under specific conditions (Schedule 6ZA paras 8-9). Help to Buy ISA bonus claims and Lifetime ISA bonus claims at FTB purchase do NOT disqualify you from the SDLT FTB relief - they're separate schemes that can coexist.
How does SDLT work in Scotland and Wales?
SDLT is England-and-Northern-Ireland only. Scotland and Wales have devolved property transaction taxes. Scotland: Land and Buildings Transaction Tax (LBTT) since April 2015. Bands and rates differ from SDLT: 0% to £145,000, 2% £145,001-£250,000, 5% £250,001-£325,000, 10% £325,001-£750,000, 12% above £750,000. FTB threshold £175,000 (no max property cap unlike SDLT). Additional Dwelling Supplement (ADS): 8% surcharge from December 2024 (raised from 6%). Wales: Land Transaction Tax (LTT) since April 2018. Bands: 0% to £225,000, 6% £225,001-£400,000, 7.5% £400,001-£750,000, 10% £750,001-£1,500,000, 12% above. No specific FTB relief in Wales - the higher zero-band serves that purpose. Higher Rates Residential Transactions surcharge: 5% from December 2024 (raised from 4%). See our LBTT calculator for Scotland and LTT calculator for Wales.
When and how do I pay SDLT?
Filed and paid within 14 days of completion (cut from 30 days in March 2019). Submitted via your solicitor or conveyancer using HMRC's online SDLT system - they file and pay on your behalf at completion as part of the conveyancing process. The SDLT certificate (SDLT5) is issued by HMRC after successful submission and is required by HM Land Registry to register the property transfer. Missing the 14-day deadline triggers penalties: £100 fixed + £200 if more than 3 months late + £200 again at 6 months + up to 100% of the tax due for deliberate failure. Interest accrues at the HMRC prescribed rate (7.5%+ in 2025-26) from the original due date. Solicitor failures account for the majority of late-filing penalties - the buyer is liable even if the solicitor missed the deadline (you can sue the solicitor for the penalty as negligence). Pre-completion SDLT planning: confirm the SDLT amount in writing with your solicitor BEFORE exchange of contracts; the figure should appear on the Completion Statement.
What about the £40,000 SDLT exemption threshold?
Properties under £40,000 don't trigger SDLT (Schedule 4ZA para 4(1) Finance Act 2003). Below this threshold, no SDLT return needs to be filed - the transaction is outside the SDLT regime entirely. Used most often for: very low-value share-of-property transfers, garden / driveway land purchases, ancillary property additions to existing holdings. The £40,000 threshold ALSO means the 5% second-home surcharge does NOT apply if EACH dwelling you own is under £40,000 - relevant only for very low-value portfolios in depressed areas. The threshold has been £40,000 since 2003 (no inflation adjustment over 22 years). A separate £150,000 threshold applies to non-residential and mixed-use property purchases (commercial property follows different bands entirely). Below £150,000 commercial property: zero SDLT. The £40,000 vs £150,000 distinction occasionally drives "mixed-use" SDLT planning where buyers claim a residential property is mixed-use (e.g. has a small commercial annex) to access lower rates - HMRC has aggressively challenged these claims in recent years.
Can I claim the second-home surcharge back?
Yes if you sell your previous main home within 3 years of completing the new purchase (Schedule 4ZA para 8 Finance Act 2003). The mechanism: you pay the 5% surcharge upfront at completion (because you owned 2 residential properties at the end of completion day), then claim a refund using HMRC's online SDLT refund service after selling the previous main home. The 3-year clock runs from the completion date of the new property purchase, not from exchange. Common error: buying a new home before listing the old one, then taking 3.5 years to sell the old one - surcharge is permanently forfeited. Worth refunding even for small amounts because the 5% surcharge on a £400k property = £20,000 of refundable tax. Refund processed within 15 working days of claim normally. Online service requires the SDLT5 reference from the original purchase plus proof of sale of previous main home. Special "exceptional circumstances" extension up to 5 years available if the previous home sale was prevented by pandemic restrictions or unforeseen issues (Schedule 4ZA para 11A).
Why was the temporary SDLT cut from September 2022 phased out?
The September 2022 "mini-Budget" raised the SDLT nil-rate band to £250,000 (from £125,000) and FTB threshold to £425,000 (from £300,000) as a stimulus measure during the post-COVID recovery. The Truss / Kwarteng package was largely reversed by Hunt's Autumn Statement 2022 except for the SDLT cuts, which were temporarily retained but earmarked to expire March 2025. Reeves's Autumn Budget 2024 (Labour government) confirmed the expiry would proceed - the bands reverted to pre-2022 levels on 1 April 2025 as originally scheduled. Estimated revenue impact of the expiry: ~£2.5bn/year of additional SDLT receipts vs the temporary regime. Estimated impact on housing-market activity: ~5-8% reduction in residential transactions in the months immediately after April 2025 (HMT impact assessment). Industry-body lobbying for an extension or permanent retention of the higher thresholds was rejected on fiscal grounds. The "new" April-2025 levels are functionally a return to the pre-pandemic SDLT regime.
How do shared-ownership SDLT calculations work?
Two options at the initial purchase. Market value approach: you pay SDLT on the FULL market value of the property up-front (as if you were buying it outright) - large bill now but no further SDLT on subsequent staircasing. Linked transaction approach: pay SDLT on the value of the actual share you're buying (e.g. £200k share of a £400k property = SDLT calculated on £200k). On subsequent staircasing-up purchases, additional SDLT is only triggered once your cumulative ownership exceeds 80% - then SDLT is due on the entire remaining value. The market-value election is irrevocable - choose carefully at the initial purchase. For most affordable-housing buyers expecting to staircase up significantly, the linked approach is usually cheaper (you only pay SDLT on what you've actually bought, and many shared-ownership buyers never staircase beyond 50%). For buyers planning to staircase to 100% quickly, market-value election can be cheaper. FTB relief applies under either approach for qualifying first-time buyers.
Are there exemptions for divorce / inheritance / gift?
Yes, several specific exemptions. Divorce / dissolution transfers: SDLT-free when a property transfers between spouses or former spouses pursuant to a court order under the Matrimonial Causes Act 1973 (Section 73 Finance Act 2003). Inheritance: completely SDLT-free when a property is inherited under a will or intestacy. The beneficiary takes the property as a "deemed acquisition" at the date-of-death value but no SDLT applies. Gifts: SDLT applies only on "chargeable consideration" - so a pure gift of a property (no mortgage, no payment) is SDLT-free, BUT if the recipient takes over an existing mortgage, that mortgage value IS chargeable consideration triggering SDLT. Right to Buy (council tenant purchase of council home): SDLT applies but at the discounted purchase price, not market value. Variation of will within 2 years of death (Deed of Variation): treated as if the variation was in the original will - SDLT-free transfer between beneficiaries. Bankruptcy / probate transfers: SDLT-free.
What records and supporting documents should I keep?
Keep for at least 6 years (HMRC discovery window for SDLT): (1) The SDLT5 certificate confirming the return was filed - this is your proof of SDLT payment. (2) Completion Statement from your solicitor showing the SDLT amount paid as part of completion. (3) The signed SDLT return (or your solicitor's copy of what was filed). (4) Conveyancing solicitor invoice showing the SDLT figure separately. (5) Any FTB declaration if you claimed first-time buyer relief. (6) If second-home surcharge applied: documentation of when you completed and when you sold the previous home (relevant for the 3-year refund window). (7) If a refund was claimed: refund confirmation from HMRC plus the claim form copy. HMRC's typical SDLT enquiry: 1 in ~80 returns, focused on (a) FTB relief eligibility claims, (b) mixed-use vs residential reclassification (much higher residential rates), (c) second-home surcharge non-claims where it should apply, (d) "linked transactions" where multiple purchases in a short window should be aggregated.
Related calculators and guides
- Stamp Duty calculator - interactive SDLT calc with all surcharges and buyer types.
- UK Stamp Duty rules guide - extended narrative on SDLT framework.
- First-time buyer SDLT checklist - step-by-step FTB relief verification.
- LBTT calculator - Scotland's equivalent (different bands).
- LTT calculator - Wales' equivalent (different bands).
- Mortgage affordability calculator - the borrowing-capacity side of the purchase.
- CGT on second home - the disposal-side tax when you later sell.
- Landlord tax guide - full BTL tax framework including SDLT.