The Budget on 28 October 2026 left residential Stamp Duty Land Tax untouched. The rates and thresholds have not changed since 1 April 2025, and nothing announced in the November 2025 Budget, the March 2026 Spring Statement or the Finance Act 2026 altered them. But a stable headline rate hides how much more expensive SDLT has become for anyone buying a second home, buying from overseas or buying through a company. A non-resident buying an additional home now pays a marginal rate of 19% on the slice of the price above £1.5 million, and a company can pay a flat 19% of the whole price.
This article sets out where the tax stands as at November 2026, the rules that catch people out, and what may be coming next. It covers SDLT in England and Northern Ireland; Scotland and Wales have their own taxes, with different rates.
How we got here
- 1 April 2021: a 2% surcharge for non-UK resident buyers is introduced.
- 23 September 2022 to 31 March 2025: a temporary increase in the nil-rate band to £250,000, and in first-time buyers’ relief to £425,000 on purchases up to £625,000.
- 1 June 2024: Multiple Dwellings Relief is abolished.
- 31 October 2024: the surcharge for additional dwellings rises from 3% to 5%, and the flat rate for companies buying homes worth more than £500,000 rises from 15% to 17%.
- 1 April 2025: the temporary thresholds expire. The nil-rate band returns to £125,000, and first-time buyers’ relief to £300,000 on purchases up to £500,000.
Since then, there have been no changes to the residential rates.
The current rates
SDLT is charged in slices, like income tax: each rate applies only to the part of the price that falls within its band.
| Part of the price | Standard | Additional dwelling | Non-resident | Non-resident and additional dwelling |
|---|---|---|---|---|
| Up to £125,000 | 0% | 5% | 2% | 7% |
| £125,001 to £250,000 | 2% | 7% | 4% | 9% |
| £250,001 to £925,000 | 5% | 10% | 7% | 12% |
| £925,001 to £1,500,000 | 10% | 15% | 12% | 17% |
| Over £1,500,000 | 12% | 17% | 14% | 19% |
First-time buyers pay nothing on the first £300,000 and 5% on the part between £300,001 and £500,000, but only if the price is £500,000 or less. Above that, the relief is lost entirely.
Companies and other “non-natural persons” buying a dwelling for more than £500,000 pay a flat 17% of the whole price, or 19% if the company is non-resident, unless a relief applies, for example for a genuine property rental business. Where a relief applies, the company pays the additional dwelling rates instead.
What that means in practice
| Purchase price | Standard | Additional dwelling | Non-resident and additional dwelling | Company at the flat rate |
|---|---|---|---|---|
| £750,000 | £27,500 | £65,000 | £80,000 | £127,500 |
| £2,000,000 | £153,750 | £253,750 | £293,750 | £340,000 |
Second homes: the 5% surcharge
The higher rates apply where an individual buys a dwelling for £40,000 or more and, at the end of the day of completion, owns another dwelling worth £40,000 or more, unless the purchase replaces their main residence. The detail is where people go wrong.
- Property anywhere in the world counts. A flat in Dubai or a share in a family home in Mumbai can trigger the surcharge on a purchase in London.
- Spouses and civil partners are treated as one. Buying in one spouse’s sole name does not avoid the surcharge if the other spouse owns a property, unless they are permanently separated.
- One buyer is enough. If two people buy together and the surcharge would apply to either of them, it applies to the whole purchase.
- Children’s property counts as the parents’. A property held for a child under 18 is treated as belonging to the parents.
- Replacing your main residence. If you buy your new home before selling the old one, you pay the surcharge, but you can reclaim it if you sell your previous main residence within three years. The claim must be made within 12 months of the sale, or of the filing date for the return on the new purchase if later. Selling only part of your interest, or selling to your spouse, does not count.
- Inherited shares. A share of 50% or less in a property inherited in the last three years is ignored.
Overseas buyers: the 2% surcharge
A buyer is treated as non-resident for SDLT purposes if they have not been present in the UK for at least 183 days in the 12 months before completion. This is a separate test from residence for income tax, and many people who think of themselves as living in the UK fail it after a period working abroad.
As with the 5% surcharge, if any one of two or more buyers is non-resident, the 2% applies to the whole purchase. A buyer who pays the surcharge but goes on to spend 183 days in the UK in any continuous 365-day period within the year either side of completion can reclaim it, but the claim must be made within two years of completion. Keep a record of your travel from the outset.
Ten traps to watch for
- The first-time buyers’ cliff edge. On a purchase at £500,000 a first-time buyer pays £10,000. At £500,001 the relief is lost and the tax is £15,000. Every buyer must be a first-time buyer, and having ever owned a home anywhere in the world, including by inheritance, disqualifies you.
- Overseas property you have forgotten about. A share in an inherited family property abroad can cost you the first-time buyers’ relief and trigger the 5% surcharge.
- Missing the three-year window. If your old home is not sold within three years of buying the new one, the surcharge cannot be reclaimed.
- Transfers of equity with a mortgage. When someone is added to the title and takes on a share of the mortgage, that share of the debt is treated as the price paid, and SDLT may be due, at the higher rates if the new owner has a property of their own.
- Mixed-use claims. Non-residential rates (a top rate of 5%) apply where a purchase includes non-residential land, but the courts have taken a broad view of what counts as a dwelling’s “garden or grounds” (Hyman v HMRC, Court of Appeal, 2022). Taxpayers have succeeded where the land was genuinely separate, as with the paddock in HMRC v Suterwalla (Upper Tribunal, 2024) and in Sehgal (First-tier Tribunal, 2025), where a basement storage unit bought with an £18.25 million Grosvenor Square flat led to a refund of over £1.7 million. HMRC has said it will seek to appeal Sehgal, and it is not binding on other tribunals. Claims need careful evidence and a realistic view of the risk.
- “Uninhabitable property” reclaim agents. In Mudan v HMRC (2025) the Court of Appeal held that a house needing rewiring, replumbing and a new boiler was still a dwelling. HMRC warned in July 2025 that it is pursuing speculative reclaims, and the buyer, not the agent, is liable for the tax, interest and penalties if a claim fails.
- Linked transactions. Purchases from the same seller, or between connected parties, can be aggregated, and since Multiple Dwellings Relief was abolished there is no longer a way to average the rate across several dwellings bought together.
- Annexes. A granny annexe bought with the main house does not trigger the 5% surcharge if the main house is worth at least two-thirds of the total, but the rules are technical and should be checked before exchange.
- The 14-day deadline. The return must be filed and the tax paid within 14 days of completion. Penalties and interest run automatically if it is late.
- Buying through a company without a relief. A company buying a home for its owners to live in pays the flat 17% (19% if non-resident), and the property may also be subject to the Annual Tax on Enveloped Dwellings, which rises by 3.5% from 1 April 2027. Overseas companies must also be registered on the Register of Overseas Entities before they can be registered as owner.
What is coming next
The High Value Council Tax Surcharge. Announced in the November 2025 Budget, this is intended to apply from April 2028 to homes in England worth £2 million or more at April 2026 values, as an annual charge on top of ordinary council tax. It will be payable by the owner, not the occupier, at £2,500 a year for homes worth £2 million to £2.5 million, £3,500 up to £3.5 million, £5,000 up to £5 million and £7,500 above that, rising with inflation from 2029-30. Homes left substantially unfurnished and unoccupied for 12 months or more will pay double, and owners on lower incomes will be able to defer payment until the property changes hands. It is not a stamp duty charge, but for buyers in prime central London it adds a significant running cost to factor into the price.
Rent under assured tenancies. When the Renters’ Rights Act 2025 turned fixed-term assured shorthold tenancies into rolling periodic tenancies on 1 May 2026, some tenants risked an SDLT charge on their rent. The government has announced that SDLT will no longer be charged on rent under assured tenancies from that date, and HMRC is not collecting it in the meantime, but the legislation has not yet been passed. Lettings at a rent of more than £100,000 a year, and lettings to companies, are not assured tenancies, so tenants in the most expensive central London lettings remain within the ordinary rules for leases.
Wider reform. There have been repeated reports that the Treasury has considered replacing SDLT on more expensive homes with an annual property tax. None of this has been announced, and the 2026 Budget left SDLT as it was. Until legislation is published, buyers should plan on the basis of the current rules.
How we can help
We confirm the SDLT payable on every purchase before you exchange contracts, and file the return for you after completion. Where the surcharges are in play, particularly for overseas buyers, second-home owners and purchases through companies or trusts, it pays to take advice before you commit, not after. See our residential conveyancing and prime and international purchases services, or contact us to discuss your purchase.
This article is for general information only and reflects the law at the date of publication. It is not legal advice and should not be relied on as such. For advice on your own circumstances please contact us.