Stamp duty in 2026: what's changing and what you owe

Stamp Duty Land Tax (SDLT) remains firmly in place for property buyers in England and Northern Ireland. No abolition is planned for the next budget, and senior ministers ruled out immediate changes in July 2026. The rules that took effect on 1 April 2025 are the ones you are working with now. Here is what that means in practice:

• Nil-rate band: £125,000 (standard residential purchases)
• First-time buyer nil-rate band: £300,000, with 5% on £300,001–£500,000; no relief above £500,000
• Additional dwelling surcharge: +5 percentage points on top of standard rates (raised from +3pp on 31 October 2024)
• Non-resident surcharge: +2 percentage points on top of all other applicable rates
• Where to check: Gov is the authoritative starting point; the Commons Library briefing gives a clear policy overview

Treasury officials have studied reform options, including a proportional annual property tax and a sales levy on homes above £500,000, but no final decision has been taken.

Key takeaways

The April 2025 reversion to lower nil-rate thresholds is now the permanent baseline, and no abolition of SDLT is planned for the next budget.

Table of Contents

How does stamp duty work now: rates, bands and reliefs explained

SDLT is a slice-based tax, not a flat rate. You pay each percentage only on the portion of the purchase price that falls within that band, not on the whole amount. The buyer is legally responsible for paying and filing, though your conveyancer or solicitor files the SDLT return and pays on your behalf within 14 days of completion.

Standard residential rates from 1 April 2026

The current SDLT rates published by HMRC are:

Worked examples

Additional dwelling surcharge and non-resident surcharge

If you are buying a second home, a buy-to-let property, or any additional residential dwelling, add 5 percentage points to every band. A standard buyer purchasing a £400,000 second home pays £10,000 plus the surcharge on each band, bringing the total to £30,000. The non-resident surcharge adds a further 2 percentage points on top of all applicable rates, including the additional dwelling surcharge where both apply.

Pro Tip: If you sell your previous main residence within 36 months of buying a new one, you may be entitled to a refund of the additional dwelling surcharge. Contact HMRC directly or ask your conveyancer to check eligibility before the window closes.

What changed between 2020 and 2025, and why it matters now

Understanding the recent timeline explains why the current rates feel lower in some bands than buyers expected a few years ago, and why the April 2025 reversion caught some purchasers off guard.

• July 2020: The government introduced a temporary nil-rate band of £500,000 to stimulate the market during the pandemic. Buyers completing before 30 June 2021 paid no SDLT on the first £500,000.
• July 2021: The nil-rate band stepped down to £250,000 until 30 September 2021, then reverted to the pre-pandemic level of £125,000.
• September 2022: The government raised the nil-rate band again to £250,000 and increased the first-time buyer nil-rate threshold to £425,000 (with 5% applying up to £625,000). These were presented as permanent changes at the time.
• 31 October 2024: The additional dwellings surcharge rose from 3 percentage points to 5 percentage points. Buyers of second homes and investment properties completing on or after that date faced a materially higher bill.
• 1 April 2025: The temporary thresholds introduced in September 2022 formally expired and reverted. The nil-rate band dropped back to £125,000, and the first-time buyer nil-rate threshold fell from £425,000 to £300,000.

The practical effect of the April 2025 reversion was significant. A first-time buyer purchasing at £425,000 before 1 April 2025 paid no SDLT on the first £425,000. Many buyers rushed to complete before the deadline, which contributed to a spike in completions in March 2025.

The Commons Library briefing on SDLT provides a detailed policy timeline and compares SDLT with the devolved equivalents in Scotland and Wales.

Pro Tip: Always use the HMRC SDLT calculator on GOV.UK to check your liability before exchanging contracts. Rates and reliefs can change, and a calculation done six months ago may no longer be accurate.

What reforms are being discussed: annual tax, sales levy and other options

The debate about what is happening with stamp duty goes well beyond the current rules. Treasury officials have been examining whether SDLT should be replaced entirely, and two broad options have attracted most of the analysis.

Option 1: A proportional annual property tax. Rather than paying a large lump sum on purchase, owners would pay a recurring annual charge based on the property's value. Think-tank modelling, including work by Onward referenced in BBC reporting, suggests this would smooth revenue for the Exchequer but would not replicate the large single-year cash receipts SDLT currently generates.

Option 2: A sales levy on higher-value properties. The Guardian reported that Treasury officials studied a levy targeting properties above £500,000, which would exempt most standard transactions while applying a charge to the top of the market. The Independent noted that no final policy decision had been taken at the time of reporting.

The trade-offs

• For the Exchequer: An annual tax smooths revenue but creates a transition gap. SDLT raises billions in the year it is collected; an annual tax spreads that over decades.
• For homeowners: An annual charge hits asset-rich, cash-poor owners, particularly retirees in high-value properties, who currently pay SDLT once and then nothing further.
• For mobility: SDLT is widely criticised for discouraging people from moving, particularly downsizing. An annual tax or sales levy could reduce that friction.
• For investors: Buy-to-let yield models would need recalculating if an annual charge replaced the current upfront cost.
• Administrative complexity: Valuing millions of properties annually and collecting recurring charges from owner-occupiers is a significant operational challenge for HMRC.

Pro Tip: If you are a buy-to-let investor or own multiple properties, model both scenarios now: your current SDLT exposure under existing rules, and a rough annual charge equivalent. The gap between the two will tell you whether a reform would benefit or penalise your portfolio.

The political picture is clear for now. Ministers publicly ruled out scrapping SDLT at the next budget, which reduces the near-term risk of sudden change. If any reform were to proceed, a consultation period and phased implementation would almost certainly follow, giving buyers and sellers time to plan.

How Scotland and Wales differ: LBTT and LTT compared with SDLT

SDLT applies only in England and Northern Ireland. If you are buying in Scotland or Wales, a different tax applies entirely.

Scotland: Land and Buildings Transaction Tax (LBTT) Administered by Revenue Scotland, LBTT has its own band structure and thresholds. The nil-rate band for residential purchases in Scotland is £145,000, higher than England's £125,000. First-time buyer relief in Scotland raises that threshold to £175,000. Scotland also applies an Additional Dwelling Supplement (ADS) for second homes and investment properties.

Wales: Land Transaction Tax (LTT) Administered by the Welsh Revenue Authority, LTT applies to purchases in Wales. The nil-rate band is £225,000 for standard residential purchases.

Quick pointers for buyers moving between jurisdictions:

• The tax you pay depends on where the property is located, not where you live.
• Rates, bands, and reliefs differ materially between England, Scotland, and Wales. Do not assume the figures you have seen for SDLT apply in Scotland or Wales.
• Neither LBTT nor LTT currently includes a non-resident surcharge equivalent to England's 2% addition.
• First-time buyer relief thresholds differ in each nation: £300,000 in England, £175,000 in Scotland, and no equivalent first-time buyer relief in Wales at the time of writing.
• If you are buying in Scotland, check Revenue Scotland's LBTT guidance directly. For Wales, the Welsh Revenue Authority publishes current LTT rates and guidance.

Pro Tip: If you are relocating from England to Scotland or Wales, your conveyancer must be familiar with the devolved tax regime that applies. A solicitor experienced only in SDLT may not be the right choice for a Scottish or Welsh purchase.

What should you do now as a buyer or seller?

Knowing the rules is one thing; acting on them correctly is another. Here is a clear sequence of steps to follow.

1. Check the current SDLT rates on GOV.UK before you make an offer. Use the official HMRC calculator to get an accurate figure for your specific purchase price, buyer status, and whether any surcharges apply. 2. Budget for SDLT as an upfront cost at completion. SDLT is not added to your mortgage in most cases. You need the cash available on completion day, alongside your deposit and conveyancing fees. 3. Confirm your conveyancer will file the 14-day return. The legal responsibility sits with you as the buyer, but your solicitor or licensed conveyancer will normally file and pay on your behalf. Ask them to confirm this in writing at the outset. See the conveyancing process in England for a full breakdown of who does what. 4. Ask about the additional dwelling surcharge before exchanging. If you own another property anywhere in the world and have not yet sold your previous main residence, you may be liable for the +5pp surcharge. Clarify your position with your conveyancer before you commit. 5. Check refund eligibility if you are replacing your main residence. If you paid the surcharge because you had not yet sold your previous home, and you sell it within 36 months of your new purchase completing, you can reclaim the surcharge from HMRC. 6. Ask your conveyancer these specific questions:

• "Will you file the SDLT return within 14 days of completion?"
• "Do I qualify for first-time buyer relief, and have you confirmed this with HMRC guidance?"
• "Is there any likelihood of a refund being due after completion?"
• "Are you experienced with the surcharge rules for additional dwellings?"

Where buyers are most often surprised: the additional dwelling surcharge cliff edge. If you complete on a new purchase before your existing property sells, you pay the full surcharge on day one. Many buyers do not realise this until they receive their completion statement. Understanding how long conveyancing takes helps you time a simultaneous sale and purchase more accurately, reducing the risk of an unintended surcharge liability.

Why an annual property tax differs fundamentally from SDLT

The technical distinction between SDLT and a proposed annual or proportional property tax matters more than most commentary suggests.

SDLT is a transaction tax: it arises once, at the point of purchase, and is calculated on the price paid. The Exchequer receives a large lump sum immediately. The buyer's future behaviour, whether they renovate, let, or sell, has no further SDLT consequence unless they buy again.

An annual property tax is a holding tax: it arises every year, based on the property's assessed value, regardless of whether a transaction occurs. The revenue profile for the government shifts from lumpy and transaction-dependent to smooth and predictable. Think-tank modelling cited by the BBC highlights that this smoothing benefit comes at the cost of a significant transitional funding gap, because the Exchequer would lose years of upfront SDLT receipts before annual charges built up to an equivalent level.

The behavioural effects diverge sharply too:

• Under SDLT, moving home is expensive. Many owners stay put rather than pay a large tax bill, which reduces housing market liquidity.
• Under an annual tax, moving becomes cheaper or free at the point of transaction, but owning becomes more expensive every year. Owners in high-value areas who are asset-rich but cash-poor face a recurring charge they cannot easily meet.
• For buy-to-let investors, an annual charge replaces a one-off acquisition cost with a recurring overhead. Gross yield calculations change materially, because the annual tax reduces net income rather than increasing purchase cost.

Pro Tip: If you own investment property and are modelling the impact of a potential annual tax, use the current SDLT cost as a rough proxy for the capitalised value of an annual charge at a given rate. If the annual charge would exceed your net rental yield, the investment case changes significantly.

HM Treasury is also modernising stamp taxes on shares into a Securities Transfer Tax from 2027, a separate reform that signals broader government interest in updating the stamp tax framework, though it has no direct bearing on residential SDLT.

What this means if you are buying or selling in 2026

The current rules are stable in the short term, and that stability is actually useful information. With ministers having publicly ruled out immediate abolition, you can plan your purchase or sale on the basis of the rates that have applied since 1 April 2025 without worrying that the rules will shift before you complete.

That said, the reform discussion is real and ongoing. If you are in a position to choose your timing, completing a purchase sooner rather than later locks in the current SDLT regime. If you are a second-home buyer or investor, the +5pp surcharge is now a permanent feature of your cost calculation, not a temporary measure.

The one area where timing genuinely matters is the replacement main residence rule. If you are selling your current home and buying a new one, structuring the transactions so they complete simultaneously avoids the surcharge entirely. If a gap is unavoidable, you have 36 months to sell the old property and reclaim the surcharge. Your conveyancer should flag this at the outset.

Getting a conveyancing quote that includes clear SDLT handling is the single most practical step you can take right now. Conveyancing-solicitor connects buyers and sellers with SRA- and CLC-regulated firms that handle SDLT returns as part of a fixed-fee service, so there are no surprises at completion. You can also review the full costs of buying a home to see how SDLT fits alongside other purchase costs.

Authoritative places to read next

The sources below are the most reliable places to check current rates, understand policy proposals, and get practical consumer guidance.

• Gov — the definitive source for current bands, rates, first-time buyer relief, and surcharge rules. Use the built-in SDLT calculator here.
• Gov — explains the 14-day return deadline, who is responsible, and how to pay.
• Gov — the official record of the pandemic-era changes and their formal expiry on 1 April 2025.
• Commons Library briefing: SDLT current situation and developments — a concise, authoritative policy timeline covering SDLT, LBTT, and LTT. Useful for understanding how the rules evolved and what Parliament has debated.
• BBC: Homeowners could face a new tax on house sales above £500,000 — clear summary of Onward think-tank modelling and the reform options under discussion.
• The Guardian: Treasury considering national property tax — reports on what Treasury officials have been studying, including the £500,000 threshold in early modelling.
• The Independent: Options for a sales levy or annual tax — balanced coverage of the revenue and behavioural trade-offs, with the important caveat that no final decision has been made.
• Mortgage Solutions: Ministers rule out stamp duty changes — the most recent political signal, confirming no immediate abolition or major reform at the next budget.
• MoneyHelper: Stamp duty explained — practical, consumer-focused guidance on thresholds, worked examples, and common questions. A good starting point if you want plain-English answers before speaking to a solicitor.

This article is general information, not a substitute for advice from a qualified financial advisor. Consult a qualified financial professional about your own circumstances before acting on anything here.

Sources

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