Stamp Duty London Buyer Guide | Rates, Reliefs, and Surcharges
What London Buyers Will Actually Pay in Stamp Duty
Stamp Duty Land Tax, or SDLT, is the tax HMRC charges when you buy property in England or Northern Ireland above a certain price. For most London buyers it is the single biggest expense after the deposit, and it tends to catch first-time buyers by surprise because nobody mentions it until you are three weeks into a deal and your solicitor sends the completion statement.
This guide covers how SDLT works, the current bands, the reliefs you might qualify for, and the surcharges that catch out second-home buyers and overseas buyers.
How the tax actually works
SDLT is banded, not flat. You pay different rates on different portions of the purchase price, the same way income tax works. Buying a £600,000 flat does not mean paying 5% on £600,000. You pay 0% on the first slice, then 2% on the next, then 5% on the remainder.
The current standard rates for a main residence are roughly as follows. Verify these against HMRC before quoting them to a client — SDLT changes most years in the Budget.
- £0 to £125,000: 0%
- £125,001 to £250,000: 2%
- £250,001 to £925,000: 5%
- £925,001 to £1,500,000: 10%
- Over £1,500,000: 12%
Worked example for a £550,000 London flat: zero on the first £125k, 2% on the next £125k (£2,500), then 5% on the remaining £300k (£15,000). Total SDLT bill: £17,500.
First-time buyer relief
First-time buyers get a more generous deal, as long as the property is your only home, you have never owned anywhere in the UK or abroad, and the price is under a set ceiling. Currently:
- No SDLT on the first £300,000
- 5% on anything between £300,000 and £500,000
- No relief at all on properties over £500,000
In London, that £500,000 ceiling is the catch. Plenty of first-time buyers find themselves looking at flats just above the threshold and lose the relief entirely. Worth knowing before you bid.
The second-home surcharge
If you already own a property anywhere in the world, you pay an additional surcharge on a purchase. As of October 2024 the surcharge sits at 5% on top of the standard rates (it was 3% before the 2024 Autumn Budget — verify the current figure).
This applies to buy-to-let purchases, second homes, holiday lets, and any situation where you will end the day owning more than one residential property. There is a refund mechanism if you replace your main residence within 36 months and end up with one home again, but the cash leaves your account at completion either way.
The non-UK resident surcharge
A further 2% is added on top of all of the above if you are not a UK tax resident at the time of purchase. This applies even if you are a British citizen living abroad. The HMRC test is essentially whether you spent 183 days or more in the UK in the year before completion.
When you actually pay
SDLT is due within 14 days of completion. Your solicitor handles the return and pulls the funds from your completion monies, so you do not need to do anything other than make sure the cash is sitting in their client account on time.
Three things most buyers miss
- Mixed-use rates. If the property has a commercial element (a shop with a flat above, for example), it falls under commercial SDLT rates, which can work out cheaper. Worth flagging to your solicitor.
- The 36-month replacement rule. If you are buying before you have sold your existing home, you pay the 5% surcharge at completion but can reclaim it if your old place sells within 36 months.
- Joint purchases with someone who already owns. If your partner owns a flat and you do not, but you buy together, the surcharge still applies because HMRC looks at the household, not the individual.
Want help running the numbers?
If you are weighing up a London purchase and want to know exactly what your SDLT bill will look like, get in touch. We can run the figures alongside the full cost stack (legal fees, survey, mortgage broker, removals) so there are no surprises at completion.