Stamp duty costs for UK and overseas property buyers

How the tax is charged

Stamp Duty Land Tax is a slice tax, not a cliff-edge tax. This is the single most useful thing to understand about it, and the thing most often got wrong.

Each rate applies only to the portion of the price that falls within its band. If you buy at £300,000, you do not pay one rate on the whole £300,000. You pay nothing on the first £125,000, then 2% on the slice between £125,001 and £250,000, then 5% on the remaining £50,000. Going £1 over a threshold therefore costs you a few pence, not a step change of thousands.

The tax is calculated on the chargeable consideration — normally the purchase price, but it can include other things given in exchange. Your solicitor calculates the final figure and files the return.

Standard residential rates

These are the rates that apply in England and Northern Ireland from 1 April 2025 where you are buying a single residential property that will be your main home and you already own another property, or are otherwise not eligible for relief:

A worked example at £400,000: nil on the first £125,000, 2% on the next £125,000 giving £2,500, and 5% on the remaining £150,000 giving £7,500 — a total of £10,000.

First-time buyers

First-time buyer relief means no stamp duty on the first £300,000, and 5% on the portion between £300,001 and £500,000. Where the purchase price is more than £500,000 the relief is not available at all and the standard rates apply to the whole price.

That £500,000 point is a genuine cliff edge, and one of the few in the system. A first-time buyer purchasing at £500,000 pays £10,000; at £505,000 the relief disappears and the standard rates produce a materially higher bill. If you are a first-time buyer negotiating close to that figure, it is worth knowing exactly where you stand.

To qualify you must never have owned a residential property anywhere in the world — including by inheritance, and including property owned outside the UK. This catches out some international buyers who consider themselves first-time buyers in the UK but own a property in their home country.

The additional property surcharge

If, at the end of the day of the transaction, you own more than one residential property, a surcharge applies. It is currently 5% and has applied at that level since 31 October 2024. It generally applies where the price is £40,000 or more.

Two points that surprise people. First, the surcharge is charged on the entire price, not just the portion above a threshold — so on a £400,000 additional property it adds £20,000 on top of the standard £10,000. Second, property owned anywhere in the world counts. Owning an apartment in Istanbul or Berlin can make a London purchase an additional property for stamp duty purposes.

There is a replacement-of-main-residence rule: if you are buying a new main home and selling your previous one, the surcharge may not apply, or may be refundable if the sale completes within the permitted window after the purchase. The rules are detailed and the time limits matter. Confirm your position with your solicitor before completion rather than after.

The non-UK resident surcharge

A further 2% surcharge applies to purchases of residential property in England and Northern Ireland by buyers who are not UK resident for stamp duty purposes. It sits on top of whatever else applies — standard rates, first-time buyer rates, and the additional property surcharge.

The residence test used here is specific to stamp duty and is not the same as the statutory residence test used for income tax. Broadly it looks at days of presence in the UK in the period around the transaction, and there is scope for a refund if you subsequently meet the test. Because it is its own test with its own timing rules, assumptions based on your income tax position are unreliable.

Where a purchase is by more than one person, or by a company or trust, there are specific rules on when the surcharge bites. This is worth checking early — it can influence how a purchase is structured, and the decision is much cheaper to take before exchange than after.

How the surcharges stack

The surcharges are additive, and applied to the full price. The clearest way to see this is the same property bought in three different situations. All three examples are a £500,000 purchase in England:

The workings: the standard band charge on £500,000 is £15,000. First-time buyer relief reduces that to £10,000 — nil to £300,000, then 5% on £200,000. The additional property surcharge adds 5% of £500,000, which is £25,000. The non-resident surcharge adds 2% of £500,000, which is £10,000.

Five times the tax between the cheapest and the most expensive case, on an identical property at an identical price. This is why establishing your stamp duty position is the first thing to do when setting a budget, not the last.

Scotland and Wales

Stamp Duty Land Tax does not apply in Scotland or Wales. Scotland charges Land and Buildings Transaction Tax, administered by Revenue Scotland, with its own bands and its own Additional Dwelling Supplement. Wales charges Land Transaction Tax, administered by the Welsh Revenue Authority, again with its own bands and higher rates for additional properties.

The structures are similar in principle — banded, with a surcharge for additional properties — but the thresholds and rates are different, and the reliefs differ too. If you are buying outside England and Northern Ireland, use the relevant authority as your source rather than any figure in this article.

What can change

Stamp duty is a frequent target for change. Thresholds have moved several times in recent years, sometimes announced at a Budget and effective almost immediately, sometimes with a transitional period for transactions already in progress.

Treat every figure here as correct at the date of last review and verify before you rely on it. HMRC publishes a calculator, linked below, which is the quickest way to check a specific case, and your solicitor will confirm the position for your transaction. Where a purchase is straddling an announced change, the date that matters is usually completion rather than exchange — but transitional rules vary, so ask.

Written by

Berkan Akşit

Founder of ABA Financial Consultancy Ltd, a London-based consultancy working with Turkish and international clients on UK property and mortgage journeys. Berkan supports clients with their mortgage options through Capricorn International, and writes the ABA UK Mortgage Guide in English and Turkish.

Last reviewed August 2026