Stamp Duty Land Tax

How much does it raise?

How does it work?

Stamp duty is charged in slices, like income tax. You pay nothing on the first slice, then a rate on the next, and so on. Before 2014 it was a slab tax where crossing a threshold by a pound re-rated the whole price, which created absurd dead zones just above each threshold; slicing fixed that.

First-time buyers get a higher starting threshold, but only up to a price ceiling. Buy for a pound over that ceiling and the relief disappears entirely, which recreates a cliff edge at exactly the point first-time buyers in expensive areas are buying.

Buying an additional property, a second home or a buy-to-let, adds a surcharge on the whole price, not just the top slice. Non-residents pay a further surcharge on top of that.

The bands for a home in England and Northern Ireland, 2026-27. Each rate applies only to the slice of the price inside its band:

Rates: GOV.UK, Stamp Duty Land Tax rates. Checked by hand 22 September 2026.

Because the tax is paid in cash on completion and cannot be added to a mortgage, it lands precisely when buyers have least money. That is the main reason economists dislike it more than almost any other UK tax.

Buying a £400,000 home in England

Payable in cash on the day, on top of the deposit. As a second home it would be £30,000 instead, because the 5% surcharge applies to the whole price.

Work out the stamp duty on a purchase

How has it changed?

How it got here, and why each change was made:

• 1694Stamp duty begins as a charge for physically stamping legal documents, to fund war with France.
• 2003Stamp Duty Land Tax replaces the old document duty with a tax on the transaction itself.
• 2014The slab system is replaced by slices, ending the distortion where a pound over a threshold cost thousands.
• 2015Scotland replaces it with Land and Buildings Transaction Tax.
• 2016A surcharge on additional properties is introduced to cool the buy-to-let market.
• 2018Wales replaces it with Land Transaction Tax.
• 2020A holiday during the pandemic lifts the threshold to £500,000. Transactions spike before the deadline and slump after it, a clear demonstration of how sharply the tax moves timing.
• 2025Thresholds revert to lower levels, raising bills for most buyers.

Where does the money go?

Nowhere in particular. Stamp duty is not earmarked. It goes into the Consolidated Fund with almost every other tax and is spent on whatever the government of the day decides. Anyone who tells you a particular tax "pays for" a particular service is describing an illustration, not a rule.

Because it is not earmarked, the only honest way to show what it pays for is by proportion. If stamp duty land tax receipts of £15.2bn were spent in the same proportions as all public spending in 2025-26, they would break down like this. It is an illustration of scale, not a statement about where those particular pounds went.

See for every £100 of tax for the full picture.

Is it different where I live?

Scotland

Land and Buildings Transaction Tax has applied since April 2015. It has more bands than SDLT and a different starting threshold, and its additional dwelling supplement is higher than the English surcharge.

Wales

Land Transaction Tax has applied since April 2018. Wales has no first-time buyer relief; instead its zero-rate threshold is higher for everyone, which achieves something similar without the cliff edge.

Does it change what people do?

Stamp duty has one of the best-evidenced behavioural effects of any UK tax: it reduces the number of house moves. It discourages downsizing by older owners, discourages moving for work, and bunches transactions just below thresholds. The 2020 holiday produced an unusually clean natural experiment, with transactions surging before the deadline and collapsing after it.

When a tax rise stops raising money looks at the cases where the effect has been large enough to move the revenue.

How does that compare with other countries?

In 2024 the UK raised 3.7% of GDP this way: first of the 12 countries compared here.

Most countries tax property transactions, but many economists argue a recurring tax on property value does the same job with far less damage, because it does not penalise moving. That argument is close to a consensus among tax economists and has gone nowhere politically.

What are the arguments?

Both columns are set out as their strongest case, not as a preferred answer and a strawman. See how this site handles contested questions.