Stamp Duty Land Tax (SDLT)
Stamp Duty Land Tax (SDLT) is a tax paid to HMRC on the purchase of property or land in England and Northern Ireland. It is charged as a percentage of the purchase price, applied in bands, each band rate applies only to the portion of the price that falls within it, not to the whole price. SDLT is a one-off cost payable at the point of purchase, not an annual charge. It must be paid and a return filed with HMRC within 14 days of the completion date. This is handled in practice by the buyer's conveyancer as part of the transaction.
SDLT is governed by the Finance Act 2003 and subsequent Finance Acts. Rates and thresholds can and do change at each Budget, so the current position should always be verified against HMRC's SDLT guidance or confirmed with a solicitor before exchanging contracts.
The additional dwelling surcharge
For most landlord purchases, including buy-to-let acquisitions and any purchase where the buyer already owns another residential property, an additional dwelling surcharge applies on top of the standard SDLT rates. Since the Autumn Budget of 31 October 2024, this surcharge is 5 percentage points above the standard rate at every band. It replaced the previous 3% surcharge that had applied since April 2016.
The surcharge applies to every band of the purchase price, not just the portion above a threshold. On a £300,000 buy-to-let purchase, for example, the total SDLT bill is materially higher than on an equivalent first or only home purchase because the surcharge adds 5 percentage points to every band from the first pound above the nil-rate threshold.
The surcharge does not apply in limited circumstances, for example, where the purchase replaces a previous main residence sold within a set period, or where the buyer is a first-time buyer purchasing their only property. These reliefs do not typically apply to buy-to-let landlords.
April 2025 threshold changes
The standard SDLT thresholds for residential property in England changed on 1 April 2025, when a temporary nil-rate band extension that had been in place since September 2022 expired. From 1 April 2025, the nil-rate threshold reverted to £125,000 for standard purchases (down from the temporary £250,000) and £300,000 for first-time buyers (down from £425,000, with relief capped at purchases up to £500,000). Landlords buying additional dwellings are subject to the additional dwelling surcharge on top of these standard rates from the first pound above the nil-rate threshold. For a full explanation of how the April 2025 changes affected landlord acquisitions, see the August guide to stamp duty changes in April 2025.
SDLT and the wider tax picture
SDLT is paid at the point of acquisition and is not deductible against rental income for income tax purposes. However, it is added to the cost base of the property for Capital Gains Tax purposes, meaning it reduces the gain on eventual disposal. This makes SDLT part of the total acquisition cost a landlord must account for in any buy-to-let investment assessment.
Multiple dwellings relief, which previously allowed a reduced SDLT rate where six or more dwellings were purchased in a single transaction, was abolished from 1 June 2024. Landlords building portfolios through individual property purchases are not affected by this change, but those who previously used bulk acquisition strategies to access the relief should take current advice.
Scotland and Wales
SDLT applies only in England and Northern Ireland. Scotland has a separate Land and Buildings Transaction Tax (LBTT), and Wales has Land Transaction Tax (LTT). Both have their own rates, thresholds, and surcharges for additional dwellings. A landlord purchasing property outside England should take advice on the applicable regime for that jurisdiction.
The August stamp duty calculator gives an instant breakdown of what SDLT would be on any purchase price, including the additional dwelling surcharge, allowing a landlord to factor the full acquisition cost into a buy-to-let assessment before making an offer.
Frequently asked questions
What is Stamp Duty Land Tax?
Stamp Duty Land Tax (SDLT) is a tax paid to HMRC on the purchase of property or land in England and Northern Ireland. It is charged as a percentage of the purchase price across bands, must be paid within 14 days of completion, and is usually handled by the buyer's conveyancer. Rates and thresholds can change at each Budget and should always be checked against current HMRC guidance before exchange.
How much stamp duty does a landlord pay on a buy-to-let purchase?
A landlord buying an additional residential property in England pays the standard SDLT rates plus a 5% additional dwelling surcharge on every band, following the change at the Autumn Budget of October 2024. The combined bill is therefore materially higher than for an equivalent first or only home purchase. The exact amount depends on the purchase price and the current thresholds, the August stamp duty calculator gives an instant breakdown.
When is stamp duty paid?
SDLT must be paid and a return filed with HMRC within 14 days of the completion date. This deadline is strict, interest and penalties apply for late payment. In practice, the buyer's conveyancer or solicitor collects the funds and submits the return as part of the conveyancing process.
Is stamp duty tax deductible for landlords?
SDLT is not deductible against rental income for income tax purposes. It is, however, added to the cost base of the property for Capital Gains Tax purposes, which reduces the taxable gain when the property is eventually sold. As with all tax matters, landlords should confirm their position with a qualified accountant.
Does stamp duty apply in Scotland and Wales?
No. SDLT applies only in England and Northern Ireland. Scotland has Land and Buildings Transaction Tax (LBTT) and Wales has Land Transaction Tax (LTT), both are separate regimes with their own rates, thresholds, and additional dwelling surcharges.
