Stamp Duty Land Tax in 2026: Rates, Surcharges, and Planning

Stamp Duty Land Tax (SDLT) is the most significant transaction cost for property purchasers in England and Northern Ireland. With the additional dwelling surcharge raised to 5% and the non-resident surcharge adding a further 2%, buyers of second or investment properties can face effective SDLT rates of up to 19% on the highest portions of a purchase price.

Understanding the current rates — and the planning options that remain available — is essential for investors and international buyers.

Current Residential SDLT Rates (from April 2025)

The temporary first-time buyer relief thresholds introduced in September 2022 expired on 31 March 2025 and were not extended. The standard rates reverted:

Standard residential SDLT bands (April 2025 onwards):

Purchase Price	Rate
Up to £125,000	0%
£125,001 to £250,000	2%
£250,001 to £925,000	5%
£925,001 to £1,500,000	10%
Above £1,500,000	12%

First-time buyer relief (April 2025 onwards — reverted thresholds):

First-time buyers purchasing a property for up to £500,000 pay:

• 0% on the first £300,000;
• 5% on £300,001 to £500,000.

No first-time buyer relief is available above £500,000. The temporary relief thresholds (which briefly set the nil-rate threshold at £425,000 with relief available up to £625,000) expired on 31 March 2025.

The Additional Dwelling Surcharge: Now 5%

The most significant change for investors and second-home buyers is the increase in the additional dwelling surcharge from 3% to 5%, effective from 31 October 2024 (following the Autumn Budget announcement that day).

The additional dwelling surcharge applies to purchases of residential property where the buyer will own more than one residential property at the end of the day of completion. This includes:

• Buy-to-let investors;
• Second home buyers;
• Purchasers replacing a former main residence if they have not sold it by completion;
• Companies purchasing any residential property (all company purchases attract the surcharge).

At what price ranges does the surcharge bite?

For a purchase at £1m:

• Standard SDLT: approximately £43,750;
• With 5% additional dwelling surcharge: approximately £93,750 (an additional £50,000).

For a purchase at £500,000:

• Standard SDLT: approximately £15,000;
• With 5% additional dwelling surcharge: approximately £40,000.

Replacement of main residence: Where you are purchasing a new main residence and will own two properties temporarily because the previous main residence has not yet sold, the additional dwelling surcharge applies at completion. However, if the previous main residence is sold within three years of the new purchase, the surcharge can be reclaimed (refunded by HMRC via an amended SDLT return). This reclaim right was extended as part of the 2024 changes.

Company purchases: All residential property purchased by a company (including SPVs) attracts the additional dwelling surcharge on every purchase. There is no "first residential property" exemption for companies. Combined with the Annual Tax on Enveloped Dwellings (ATED), corporate residential property ownership carries a heavy ongoing tax burden.

The Non-Resident Surcharge: Additional 2%

From 1 April 2021, a further 2% SDLT surcharge applies to residential property purchases by non-UK residents. Non-residence is tested by whether the buyer has been present in the UK for fewer than 183 days in the 12-month period ending on the date of purchase, or (looking forward) the 12-month period beginning on the purchase date.

Cumulative effect for non-resident investors purchasing a second property:

Standard SDLT + 5% additional dwelling surcharge + 2% non-resident surcharge = effective rates of up to 19% on the portion of purchase price above £1.5m.

For a non-resident purchasing an investment property at £1.5m:

• Standard SDLT: approximately £93,750;
• Additional dwelling surcharge (5%): approximately £75,000;
• Non-resident surcharge (2%): approximately £30,000;
• Total SDLT: approximately £198,750 (approximately 13.3% of purchase price).

Joint purchases: Where one buyer is UK resident and one is non-resident, the non-resident surcharge applies to the entire purchase.

Refund if you become UK resident: If the buyer becomes UK resident in the 12 months following purchase (and was non-resident at the date of purchase), the 2% surcharge can be reclaimed.

SDLT on Non-Residential Property

Non-residential SDLT (applying to commercial property, mixed-use property, and purchases of six or more residential properties) has different rates:

Purchase Price	Rate
Up to £150,000	0%
£150,001 to £250,000	2%
Above £250,000	5%

The non-residential rates are substantially more favourable than residential rates for the highest price brackets. This creates an incentive to argue that a purchase is "mixed use" (e.g., a residential property with a separate commercial element). HMRC scrutinises such classifications carefully — the mixed-use classification must be genuinely supportable.

SDLT on Mixed-Use Property

If a property is genuinely mixed-use (e.g., a shop with a flat above, or a farmhouse with agricultural land), the non-residential rates apply to the entire purchase. There is no additional dwelling surcharge on mixed-use purchases.

HMRC has increasingly challenged mixed-use claims — particularly where the non-residential element (e.g., paddock or garden in excess of half a hectare) is modest. Following a number of First-tier Tribunal cases, the mixed-use classification requires genuine non-residential use that is more than incidental to the residential element.

Scotland and Wales: Different Regimes

Scotland and Wales have their own property transaction taxes:

Scotland — Land and Buildings Transaction Tax (LBTT):

• Applied by Revenue Scotland. Different rate bands from England/Northern Ireland. Additional Dwelling Supplement (ADS) is 8% in Scotland (increased from 6% to 8% from 5 December 2024).

Wales — Land Transaction Tax (LTT):

• Applied by the Welsh Revenue Authority. Higher rates band structure. Higher Rates for Additional Dwellings (HRAD) is 5% in Wales (increased from 4% in December 2024).

Purchases in Scotland and Wales are entirely outside the SDLT regime.

SDLT Avoidance Schemes: HMRC's Response

HMRC has historically been confronted with a range of marketed SDLT saving schemes — arrangements purporting to reduce SDLT on residential purchases through structures such as:

• Sub-sale relief arrangements;
• "Hive-down" structures;
• Alternative property finance arrangements;
• Annuity schemes.

HMRC has attacked most of these arrangements successfully and has obtained retrospective legislation to close loopholes. The Disclosure of Tax Avoidance Schemes (DOTAS) regime requires disclosure of SDLT schemes meeting certain hallmarks. Any arrangement marketed as a "SDLT saving scheme" should be treated with the highest scepticism. The professional and legal risks of failed SDLT schemes — penalties, interest, and professional negligence exposure — significantly outweigh any potential saving.

Legitimate SDLT planning exists (mixed-use classification, timing of transactions, first-time buyer eligibility, reclaims on main residence replacement) but is limited in scope.

Key Planning Points for 2026

1. Timing around main residence sale: If buying before selling your current home, ensure you can sell within three years to reclaim the additional dwelling surcharge.
2. Non-resident surcharge refund: If you are non-resident at purchase but expect to become UK resident within 12 months, the 2% surcharge may be refundable.
3. Mixed-use classification: Obtain specialist advice early if there is a genuine non-residential element to a purchase — but do not pursue a mixed-use claim unless it is genuinely defensible.
4. Portfolio purchases: Buying six or more residential properties in a single transaction qualifies for non-residential SDLT rates (the "multiple dwellings relief" has been abolished — but the six-property rule remains distinct).
5. Company structure decisions: The interaction of SDLT (5% surcharge), ATED, and corporation tax on rental income makes the decision whether to buy in a company or personally highly transaction-specific. Model all costs, not just SDLT.

SDLT rates and thresholds are set by legislation and can be changed at any Budget. This article reflects rates as of June 2026. Always verify current rates with a specialist SDLT adviser or solicitor before exchange of contracts.

How Global Investments Can Help

For international buyers, multiple-property investors, and individuals structuring property portfolios, SDLT is a material cost that demands careful planning before exchange. Global Investments works with specialist property tax advisers who can model SDLT across different structures and jurisdictions, advise on surcharge reclaims, and integrate SDLT planning into a broader property investment strategy. Contact us to discuss your property acquisition plans.