Stamp Duty Land Tax (SDLT) has historically been one of the most volatile taxes in the UK — frequently tweaked by Chancellors looking to influence housing demand. The combination of changes since 2024 has reset the SDLT landscape, and 2026 is the first full year in which the post-reset rules apply.
The headline SDLT bands (residential, from 1 April 2025)
- Up to £125,000: 0%.
- £125,001 to £250,000: 2%.
- £250,001 to £925,000: 5%.
- £925,001 to £1.5m: 10%.
- Above £1.5m: 12%.
This represents the end of the temporary nil-rate band increase, which had lifted the 0% threshold to £250,000 during the post-COVID housing stimulus period.
First-time buyer relief
- No SDLT on the first £300,000 of properties up to £500,000.
- 5% on the slice between £300,000 and £500,000.
- No relief at all for properties above £500,000.
The cliff edge at £500,000 means first-time buyers purchasing slightly above the threshold lose the entire relief — a £501,000 purchase pays full SDLT, costing approximately £10,000 more than a £500,000 purchase. Aggressive negotiation around this threshold is now routine.
The Higher Rates for Additional Dwellings (HRAD) surcharge
The surcharge for additional dwellings — second homes, buy-to-lets, and most company purchases — rose to 5% on top of the standard rates from 31 October 2024 (up from 3%). A £500,000 second-home purchase now incurs roughly £40,000 of SDLT, compared with around £12,500 for an owner-occupier first home.
The HRAD applies to any UK or worldwide residential property held at the date of the new purchase, even if the existing property is mortgaged or jointly owned with a non-purchaser. The 36-month replacement-of-main-residence refund window provides relief for people genuinely moving home but slow to sell their previous main residence.
Non-resident surcharge
A further 2% surcharge applies to non-UK residents buying residential property. Combined with HRAD, a non-UK-resident buying a second home faces 7% above the standard rates. For our Dubai-based clients investing in UK property, the SDLT cost is now often the largest single transaction expense and a key factor in deciding whether to hold property personally or through a UK company.
The 15% flat rate for corporate "high value" residential
Companies and other non-natural persons buying residential property worth more than £500,000 face a 15% flat-rate SDLT charge unless one of the exemptions (most commonly, qualifying property rental businesses) applies. The Annual Tax on Enveloped Dwellings (ATED) then sits on top each year.
Commercial property SDLT
- Up to £150,000: 0%.
- £150,001 to £250,000: 2%.
- Above £250,000: 5%.
Mixed-use properties (residential plus genuine commercial component) attract the commercial rates rather than residential rates — a substantial saving on larger transactions but a frequent source of HMRC enquiry. The "substantial commercial element" test is fact-specific.
Multiple Dwellings Relief — abolished
The previous Multiple Dwellings Relief (MDR), which reduced SDLT where a transaction included two or more dwellings, was abolished from 1 June 2024. The change particularly affects buy-to-let investors and HMO operators who used MDR to soften the effect of HRAD on portfolio purchases.
Planning angles that still work
- Replacement of main residence relief — the 36-month window allows a HRAD refund where the previous main residence is sold within three years of the new purchase.
- Mixed-use classification — careful documentation of genuinely commercial elements (working farms, properties with a serviced annexe used in a real trade) supports commercial-rate treatment.
- Chain-breaking — sometimes a short-term bridging arrangement avoids triggering HRAD on a temporary overlap.
- Linked transactions analysis — connected transactions are aggregated for SDLT; understanding this can save tens of thousands on portfolio transfers.
- Spousal acquisitions — interspousal transfers are generally exempt from SDLT, but care is needed where mortgages are involved (consideration includes assumed debt).
Refunds for previously overpaid SDLT
HMRC has tightened its scrutiny of SDLT refund claims following a wave of opportunistic mixed-use claims by reclaim firms in 2021–2023. Genuine errors and overpayments can still be reclaimed within 12 months of the filing date (or four years where HMRC's own computer made the error). Speculative reclaim firms with "no win no fee" pitches should be approached with caution — the penalty regime for unsuccessful aggressive claims is now meaningful.
Practical SDLT advice from PushDigits
SDLT is not a tax you can plan away once contracts are exchanged. It must be modelled before offer. Our tax planning team works with property lawyers and mortgage brokers to confirm the SDLT cost on every significant transaction, and we run SDLT cost comparisons for personal vs. corporate ownership for our Dubai clients investing in UK property.
If you are buying a second home, buy-to-let, mixed-use building, or any UK property above £500,000, book an SDLT review before you exchange. The numbers are too big to leave to chance.