SDLT Tax Explained: Rates, Reliefs, and the 14-Day Deadline

Stamp Duty Land Tax, or SDLT, is a tax the buyer pays when purchasing property or land in England and Northern Ireland. It was introduced by Part 4 of the Finance Act 2003 and applies to homes, commercial premises, and most transfers of a “chargeable interest” in land. Rates work in slices, like income tax, and they climbed noticeably on 1 April 2025 when temporary reductions expired. This guide walks through what you’ll pay, what reliefs exist, and what happens if you miss the filing deadline.

When SDLT Applies

SDLT is triggered whenever a chargeable interest in land changes hands. That covers buying a freehold, being assigned an existing lease, taking on a new lease, and surrendering a property interest. Both individuals and companies pay it, so a business buying its premises owes SDLT on the same footing as a family buying a house.

One important boundary: SDLT only applies to land in England and Northern Ireland. Scotland replaced it with Land and Buildings Transaction Tax in 2015, and Wales introduced Land Transaction Tax in April 2018.¹² Buyers in those countries deal with the devolved tax instead.

Standard Residential Rates

You don’t pay a single rate on the whole price. Each portion of what you pay falls into a band. For a standard residential purchase where you won’t own another property afterwards, the rates from 1 April 2025 are:

Up to £125,000: 0%
£125,001 to £250,000: 2%
£250,001 to £925,000: 5%
£925,001 to £1.5 million: 10%
Above £1.5 million: 12%

These bands took effect when the temporary £250,000 nil-rate band reverted to £125,000.³ Anyone budgeting on the old thresholds will find the bill higher than expected. On a £300,000 home, for example, SDLT is now £5,000 rather than £2,500.

First-Time Buyer Relief

If you and everyone you’re buying with have never owned a residential property anywhere, you can claim first-time buyer relief and intend to live in the property as your main home. The rates are:

Up to £300,000: 0%
£300,001 to £500,000: 5%

There is a hard cliff at £500,000. If the price is a penny over that, the relief is lost entirely and standard residential rates apply to the whole purchase.³ These thresholds also dropped on 1 April 2025 from a temporary nil-rate band of £425,000 on purchases up to £625,000, so the savings are smaller than they were during the temporary window.⁴

Second Homes, Landlords, and Non-UK Residents

If you already own a residential property anywhere in the world and the new purchase means you’ll own more than one, a 5% surcharge sits on top of the standard rates. From 1 April 2025, the combined higher rates are:

Up to £125,000: 5%
£125,001 to £250,000: 7%
£250,001 to £925,000: 10%
£925,001 to £1.5 million: 15%
Above £1.5 million: 17%

The surcharge was 3% before April 2025, so second-home buyers and landlords now pay considerably more.⁵ The surcharge does not apply if you’re replacing your only or main residence, even if there’s a short overlap in ownership while the old one is sold.

Non-UK residents pay a further 2% on top of whichever residential rates apply, including the higher rates for additional dwellings.⁵ A non-resident buying a second home could therefore face a combined top rate of 19%.

Companies and other “non-natural persons” buying residential property above £500,000 pay a flat 17%.⁶ Limited exceptions exist for property rental businesses, property developers, and property traders, which instead pay the standard higher rates.

Non-Residential and Mixed-Use Rates

Commercial property, agricultural land, and mixed-use sites (a building with both a shop and a flat, for example) use a separate, lower rate structure:

Up to £150,000: 0%
£150,001 to £250,000: 2%
Above £250,000: 5%

These rates apply to freehold purchases and lease premiums.⁷ New leases on non-residential property also attract SDLT on the net present value of the rent over the term, calculated using a separate formula.

Shared Ownership: Two Ways to Pay

Buying through a shared ownership scheme forces a choice that can shift your total tax bill significantly. You can either:

Make a market value election and pay SDLT upfront as if you’d bought the property outright at its full market value. No further SDLT is due when you staircase later.
Pay in stages: SDLT is only owed on the premium for your initial share. Nothing further is due until your ownership exceeds 80%, at which point a new return covers the cumulative amounts. Staircasing that stays below 80% triggers no extra SDLT.

The staged route usually costs less at the start, but if you eventually buy the whole property it can produce a higher total bill, because the later transactions are treated as linked and the rate reflects the cumulative consideration.⁸ The election can be made when filing the initial return, or by amending it up to 12 months after the filing deadline, and once made it cannot be cancelled.

Reliefs and Exemptions

Several transactions escape SDLT entirely or attract reduced amounts.

Transferring property to a former partner under a court order or agreement on divorce, dissolution of a civil partnership, annulment, or legal separation is fully exempt, and HMRC does not need to be notified.⁹ Property acquired through a will or on intestacy is exempt as long as the beneficiary gives no consideration beyond assuming secured debt or an inheritance tax obligation.¹⁰

Registered providers of social housing are exempt where the purchase is publicly funded or the provider meets certain conditions such as tenant control or buying from a qualifying body.¹¹ Charities buying land for qualifying charitable purposes can claim relief under Schedule 8 of the Finance Act 2003, though the relief is clawed back if the land is used for non-charitable purposes within three years.

Multiple Dwellings Relief, which used to reduce SDLT on the purchase of two or more properties in one transaction, was abolished on 1 June 2024. Only contracts exchanged on or before 6 March 2024 kept the relief under transitional rules, and that window has closed.¹²

Refunds on the Higher Rate Surcharge

If you paid the higher rate surcharge because you hadn’t yet sold your previous main home, you can claim it back once that sale completes. To qualify, the old property must be sold within three years of completing the purchase of the new one.¹³

The refund claim must be submitted within the later of 12 months after selling the old property or 12 months after the filing date of the SDLT return on the new purchase. You use form SDLT16, filed online or by post.

HMRC can extend the three-year deadline where genuinely exceptional circumstances delayed the sale, but the bar is high. Chain collapses, illness, renovation delays, and market downturns are explicitly ruled out. HMRC looks for events beyond anyone’s reasonable control that affected many people at once, such as government-imposed restrictions. There is no right of appeal if HMRC refuses, and the request will not be considered until the old property has actually been sold.

Filing and Paying: The 14-Day Deadline

You have 14 days from the effective date of the transaction, usually the completion date when the money is paid, to file an SDLT return and pay any tax due.¹⁴ The return is required even where the price falls below the nil-rate band and no tax is owed.

In practice, most buyers have their solicitor or conveyancer submit the return digitally through HMRC’s portal. If you’re handling the purchase without a legal representative, you file a paper SDLT1 return instead. Once HMRC processes the return, you receive an SDLT5 certificate, which HM Land Registry needs before it will register the change of ownership.¹⁴

What Late Filing and Errors Cost

Missing the 14-day deadline triggers automatic penalties that grow with time:

Up to 3 months late: £100 fixed penalty
More than 3 months late: £200 fixed penalty
More than 12 months late: a tax-based penalty of up to 100% of the SDLT owed

These sit on top of the tax itself.¹⁵ HMRC also charges interest on unpaid tax from the day after the filing deadline. The late payment interest rate is currently 7.75%, calculated as the Bank of England base rate plus 4%, and it moves whenever the base rate changes.¹⁶

Getting numbers wrong on the return carries its own penalties, scaled by whether the mistake was careless, deliberate, or deliberate and concealed. Coming forward voluntarily before HMRC contacts you dramatically reduces what you pay: a careless error disclosed on your own initiative can attract no penalty at all, while the same error found by HMRC first starts at 15% of the extra tax.¹⁷ If you realise you’ve made a mistake, correcting it quickly is always cheaper than waiting.

Linked Transactions and Anti-Avoidance

When two or more property transactions form part of a single arrangement between the same buyer and seller (or connected people), HMRC treats them as linked and calculates SDLT on the combined total, not each price separately. This stops buyers from splitting one deal into smaller pieces to keep each within a lower band.¹⁸ Using separate contracts changes nothing if the substance is one deal.

Section 75A of the Finance Act 2003 is a broader anti-avoidance provision. It doesn’t ask whether tax avoidance was the motive. If a series of transactions between the parties produces less SDLT than a straight purchase would have, HMRC can substitute the tax that would have been due on a direct transfer.¹⁹ The provision has been tested in court and upheld. If someone advises you to structure a purchase in an unusual way that happens to produce a lower SDLT bill, Section 75A is the reason to treat that advice with serious scepticism.

1
gov.scot. Land and Buildings Transaction Tax
2
Welsh Government. Land Transaction Tax: Overview
3
GOV.UK. Stamp Duty Land Tax: Residential Property Rates
4
GOV.UK. Stamp Duty Land Tax Relief for Land or Property Transactions
5
HM Revenue & Customs. Higher Rates of Stamp Duty Land Tax
6
GOV.UK. Stamp Duty Land Tax: Corporate Bodies
7
GOV.UK. Stamp Duty Land Tax – Rates for Non-Residential and Mixed Land and Property
8
GOV.UK. Stamp Duty Land Tax: Shared Ownership Property
9
GOV.UK. Stamp Duty Land Tax: Transfer Ownership of Land or Property
10
HM Revenue & Customs. SDLTM00570 – Scope: What Is Chargeable: Exempt Transactions
11
HM Revenue & Customs. SDLTM27500 – Reliefs: Certain Acquisitions by Registered Social Landlords
12
HM Revenue & Customs. Abolition of Multiple Dwellings Relief for SDLT (01 June 2024)
13
GOV.UK. Apply for a Refund of the Higher Rates of Stamp Duty Land Tax
14
HM Revenue & Customs. Stamp Duty Land Tax Online and Paper Returns
15
GOV.UK. Penalties for Late Land Transaction Return (SD7) Guide
16
GOV.UK. HMRC Interest Rates for Late and Early Payments
17
GOV.UK. Compliance Handbook: Penalties for Inaccuracies
18
HM Revenue & Customs. SDLTM30100 – Application: Linked Transactions FA03/S108
19
GOV.UK. SDLTM09090 – Intention and Purpose of the Legislation