If you buy a house or flat in England or Northern Ireland and will own more than one home at the end of that day, you normally pay Stamp Duty Land Tax (SDLT) at the higher rates, which are 5 percentage points above the standard bands. Buyers who are not UK resident for SDLT pay a further 2%. Companies pay the higher rates on every residential purchase, and can face a flat 17% above £500,000 unless a relief applies. Mixed-use and non-residential rates are much lower, which is why HMRC looks hard at claims to use them.
The rates in force in October 2026
The standard bands have applied since 1 April 2025, and the surcharge rose from 3% to 5% on 31 October 2024. The 2025 Budget left the main rates unchanged.
| Portion of the price | Standard rate | Higher rates | Higher rates, non-UK resident |
|---|---|---|---|
| Up to £125,000 | 0% | 5% | 7% |
| £125,001 to £250,000 | 2% | 7% | 9% |
| £250,001 to £925,000 | 5% | 10% | 12% |
| £925,001 to £1.5 million | 10% | 15% | 17% |
| Above £1.5 million | 12% | 17% | 19% |
Non-residential and mixed property has its own scale: nothing on the first £150,000, 2% on the next £100,000 and 5% above £250,000. There is no 5% surcharge and no non-resident surcharge on a genuinely mixed purchase.
Scotland and Wales have their own taxes. In Scotland, the Additional Dwelling Supplement under Land and Buildings Transaction Tax has been 8% of the whole price since 5 December 2024. In Wales, Land Transaction Tax has a separate higher rates table running from 5% to 17%, in force since 11 December 2024. The rest of this article is about SDLT.
Who pays the 5% higher rates
The test looks at what you own anywhere in the world at the end of the day of completion. If the new purchase costs £40,000 or more and you will then hold two or more homes each worth at least £40,000, the higher rates usually apply. A few points catch people out.
- Spouses and civil partners count as one unit. If your spouse owns a flat, your purchase is treated as an additional property even if you have never owned anything in your own name, unless you are permanently separated.
- Joint buyers are tested one by one. If any buyer would pay the higher rates on their own, the whole purchase pays them. A parent who owns a home and goes on the title to help a first-time buyer child usually turns the child's purchase into a higher rates one.
- Replacing your main home. If you buy a new home before selling the old one, you pay the higher rates now. Sell the old home within 3 years and you can claim the surcharge back. HMRC must receive the claim within 12 months of the sale or, if later, within 12 months of the new home's return filing date.
- Granny annexes. When a house and an annex are bought together, the annex is ignored for this purpose if it is in the grounds of, or the same building as, the main house, and the main house accounts for at least two thirds of the price. Owning another property elsewhere can still bring in the higher rates.
Buying from abroad, and buying through a company
For SDLT, an individual is non-UK resident if they spent fewer than 183 days in the UK (counting days where they were here at midnight) in the 12 months before the purchase. Nationality, visas and income tax residence do not matter. If any joint buyer is non-resident, all of them are treated as non-resident, although a married couple who are not separated count as resident if either of them passes. If you later spend 183 days in the UK within any continuous 365 days ending no later than a year after completion, the 2% can be reclaimed by amending the return within 2 years. Our guide for non-resident landlords covers the income side.
Companies pay the higher rates on any residential purchase of £40,000 or more, with no main home exception and no refund. Above £500,000, a company can be charged 17% of the whole price instead. Relief from the 17% charge is available for property used in a genuine rental business, among other uses, but it is withdrawn if within 3 years the property is occupied by a non-qualifying individual, broadly the owners and people connected with them. A UK company controlled by non-residents can also pay the 2% surcharge.
If you are weighing up a company, read limited company or personal ownership and our article on incorporating a property portfolio, because moving existing properties into a company is itself a purchase for SDLT.
Portfolios and mixed-use property
Multiple dwellings relief, which averaged the price across several homes bought together, was abolished for purchases completing on or after 1 June 2024, unless contracts were exchanged on or before 6 March 2024 and not varied afterwards. What remains is a separate rule: when six or more separate dwellings are bought in a single transaction, they are treated as non-residential, so the commercial scale applies and neither surcharge is due.
Mixed-use claims are where HMRC is most active. A shop with a flat above is genuinely mixed. A house sold with a paddock, woodland or a large garden usually is not, because a dwelling's garden or grounds count as residential land. In Hyman, the Court of Appeal confirmed in 2022 that there is no size limit and no reasonable enjoyment test for grounds. In How Development 1 Ltd, the Upper Tribunal held in 2023 that dense, largely inaccessible woodland was still part of a house's grounds. Taxpayers occasionally win, as in Suterwalla in 2024, where a separate paddock was held not to be grounds, but each case turns on its facts.
Worked examples
| Purchase | SDLT | How it is worked out |
|---|---|---|
| £300,000 buy-to-let by a UK resident who owns their home | £20,000 | 5% of £125,000 (£6,250), 7% of £125,000 (£8,750), 10% of £50,000 (£5,000). Someone buying their only home at this price would pay £5,000 at the standard rates, or nothing if they qualify for first-time buyers' relief. |
| The same flat bought by a non-UK resident who owns another home | £26,000 | 7%, 9% and 12% on the same slices: £8,750 + £11,250 + £6,000 |
| £600,000 flat bought by a company to let, with relief from 17% | £50,000 | £6,250 + £8,750 + 10% of £350,000 (£35,000). Without relief: 17% of £600,000 = £102,000. |
| £400,000 shop with a flat above | £9,500 | Nothing on £150,000, 2% of £100,000 (£2,000), 5% of £150,000 (£7,500) |
| Six flats bought together for £1.2 million | £49,500 | Non-residential rates: £2,000 + 5% of £950,000 (£47,500) |
Returns, deadlines and refund agents
The SDLT return must be filed, and the tax paid, within 14 days of the effective date, which is usually completion. A late return costs £100, or £200 if more than 3 months late, with a tax-geared penalty of up to the full tax if it is over 12 months late. Interest runs on late payment. Your conveyancer usually files, but the liability is yours.
HMRC has publicly warned about agents who offer, for a fee, to reclaim SDLT by arguing that a home was uninhabitable or mixed-use. Following the Court of Appeal's decision in Mudan, a property that needs repairs but still has the basic features of a dwelling remains residential. If a repayment is later overturned, you repay the tax with interest and possibly a penalty, while the agent may keep its fee. Genuine claims can be made directly to HMRC at no cost.
The Budget is on 28 October 2026. SDLT changes can take effect very quickly: the last increase to the surcharge applied from the day after the October 2024 Budget. If you are part way through a purchase, check what is announced before completion.
What to do now
- List every residential property you and your spouse or civil partner own or part own anywhere, before you agree a price.
- If you have lived outside the UK recently, count your days in the UK in the 12 months before the planned completion date.
- If you are buying a new home before selling the old one, diarise the 3 year sale window and the 12 month claim deadline.
- Be sceptical of any mixed-use or uninhabitable argument, especially one offered on a no win, no fee basis, and get it reviewed before a claim is made.
Our stamp duty relief service covers purchases, reliefs and repayment claims. To check your position before you exchange, book a consultation.
This article is general information about UK tax, based on the law and HMRC practice at the date shown above. It is not advice, and reading it does not make you our client. Tax rules change and their effect depends on your circumstances, so please speak to us before acting on it.