Stamp duty is a tax on buying property. It is calculated progressively, which means you pay different rates on different portions of the purchase price. Like income tax, the rate on the first pound is not the rate on the last.
For a standard residential purchase in England and Northern Ireland after April 2025, the rates are: 0% up to £125,000, 2% from £125,001 to £250,000, 5% from £250,001 to £925,000, 10% from £925,001 to £1.5 million, and 12% above that.
You calculate it band by band. On a £300,000 purchase, you pay 0% on the first £125,000, 2% on the next £125,000, and 5% on the remaining £50,000. That is £0 plus £2,500 plus £2,500, which equals £5,000 in stamp duty.
If you are buying a main home and you are not a first-time buyer, this is your bill. For most people moving home, stamp duty is a significant cost that needs to be factored into your budget. On a £350,000 terraced house in Portsmouth, you are looking at roughly £6,250.
Stamp duty is paid on completion. It is not included in your mortgage. You need the cash available on the day you complete. Many buyers forget this and find themselves scrambling for funds.
The formula
SDLT = 0% × min(price, 125,000)
+ 2% × min(max(price - 125,000, 0), 125,000)
+ 5% × min(max(price - 250,000, 0), 675,000)
+ 10% × min(max(price - 925,000, 0), 575,000)
+ 12% × max(price - 1,500,000, 0)
A worked example
£300,000 standard
= 0 + 2% × 125,000 + 5% × 50,000 = 2,500 + 2,500 = £5,000
Why this matters
Stamp duty is a real cost that needs to be in your budget before you exchange contracts. Use the progressive bands to calculate exactly what you owe. Do not rely on rule of thumb estimates.
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