Stamp Duty Land Tax is the biggest non-recoverable cost in most UK property transactions, and 2025/26 is the first full tax year that every developer is feeling the three compounding changes Rishi Sunak's pandemic threshold relief, Rachel Reeves's October 2024 Autumn Budget, and the restoration of the pre-pandemic First-Time Buyer band have all layered in. If you're modelling deals for a 2026 purchase, here's what actually matters — and where the numbers catch people out.
The three changes that landed
1. Standard nil-rate band reverted from £250,000 back to £125,000 (1 April 2025). The temporary threshold introduced in 2022 ended. Every standard purchase above £125k now pays SDLT on the portion from £125,001 upwards at 2%, and 5% from £250,001 upwards. For a £300k house, that's £5,000 in SDLT where a year earlier it was £2,500.
2. First-Time Buyer relief cap reduced from £425,000 to £300,000 (1 April 2025). The nil-rate band for FTBs fell from £425k back to £300k, and the maximum property price to qualify for any FTB relief dropped from £625k to £500k. Above £500k, first-time buyers pay standard rates on the whole lot — no relief at all. A first-time buyer on a £450k London flat now pays £7,500 SDLT; a year earlier they paid £1,250.
3. Additional Property Surcharge held at 5% (unchanged from 31 October 2024). The surcharge on second homes, buy-to-lets, and company/SPV purchases was raised from 3% to 5% in Reeves's October 2024 Autumn Budget. That 5% applies on the full purchase price from pound one, stacked on top of the standard rates. It stayed at 5% through 2025/26 — no further increase in the Spring Statement — but it's the single biggest line-item shift for portfolio investors in a decade.
Standard SDLT rates — 2025/26
| Portion of purchase price | Rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001 – £250,000 | 2% |
| £250,001 – £925,000 | 5% |
| £925,001 – £1,500,000 | 10% |
| Over £1,500,000 | 12% |
SDLT is calculated on a slice basis: each band applies only to the portion of the price that falls within it, not the whole price.
Additional Property Surcharge rates — 2025/26
If the buyer already owns any residential property anywhere in the world (or is purchasing through a company/SPV), the 5% surcharge stacks on top of every band from the first pound:
| Portion of purchase price | Standard | Additional Property |
|---|---|---|
| Up to £125,000 | 0% | 5% |
| £125,001 – £250,000 | 2% | 7% |
| £250,001 – £925,000 | 5% | 10% |
| £925,001 – £1,500,000 | 10% | 15% |
| Over £1,500,000 | 12% | 17% |
Company purchases of residential property above £500,000 by a "non-natural person" can also trigger the flat 15% ATED rate unless the property qualifies for a relief (letting business, property trader, developer in the business of redevelopment). Most SPV buy-to-lets claim the property rental business relief and pay the standard additional-property bands above; the 15% flat rate hits genuine enveloped dwellings held for personal use.
First-Time Buyer relief — 2025/26
| Portion of purchase price | Rate |
|---|---|
| Up to £300,000 | 0% |
| £300,001 – £500,000 | 5% |
| Property price above £500,000 | No relief — standard rates apply to the whole purchase |
A first-time buyer on a £400,000 flat pays £5,000 (5% on £100k above £300k). On a £501,000 purchase they pay £15,050 — standard rates on the whole thing. That cliff edge is real and catches buyers off-guard every quarter.
Non-resident surcharge
A flat 2% non-resident SDLT surcharge applies on top of everything else if the buyer has spent fewer than 183 of the past 365 days in the UK. That's stacking territory: a non-resident company buying a £2m London flat pays 12% base + 5% additional property + 2% non-resident = 19% on the highest band. The non-resident rule is tested at the effective date of the transaction, so timing of UK residency around a purchase matters.
Scenario 1: BRRR deal in the Midlands
Purchase £180,000 through a limited company, refurb £35k, refinance at £260k GDV.
- SDLT calculation (additional property rates apply to all company purchases):
- £0 – £125,000: 5% = £6,250
- £125,001 – £180,000: 7% = £3,850
- Total SDLT: £10,100
That £10,100 is non-recoverable at refinance. On a deal with £50k of real profit, SDLT eats 20% before you've swung a hammer. Before Reeves's 5% surcharge (i.e. under the old 3% regime) the same deal would have paid £6,500 in SDLT — the 2024 Budget alone added £3,600 to the numbers.
Scenario 2: First-time buyer on a development flat
You're a developer selling a completed one-bed at £475,000 in Manchester to a first-time buyer.
- £0 – £300,000: 0% = £0
- £300,001 – £475,000: 5% = £8,750
- FTB pays £8,750 in SDLT
If the unit had sold at £501,000, the FTB would owe £15,050 — a £6,300 jump for a £26,000 price difference. If you're specifying a scheme close to the £500k mark, pricing at £499,950 rather than £510,000 can be worth the margin hit to the buyer's SDLT bill. Above £500k, first-time buyers lose all relief, so build-to-sell developers targeting FTB stock should price below the cliff.
Scenario 3: Portfolio landlord adding a £250k terrace
Existing landlord buying through a personal name (not SPV). The 5% surcharge kicks in because they already own property.
- £0 – £125,000: 5% = £6,250
- £125,001 – £250,000: 7% = £8,750
- Total SDLT: £15,000
Versus a first-time buyer on the same property paying £0 SDLT (below the £300k FTB threshold). The surcharge is a £15k gap on a £250k deal — a brutal line for a landlord modelling yield.
Reliefs worth knowing about
- Multiple Dwellings Relief (MDR): ABOLISHED 1 June 2024. If you're still seeing MDR referenced in older deal calculators, those calculators are wrong. Purchases of multiple dwellings in a single transaction no longer get MDR. The only remaining multi-dwelling concession is the 6+ dwellings rule below.
- Six-or-more dwellings rule. A single transaction involving 6 or more dwellings can elect to be taxed at non-residential rates (0% to £150k, 2% to £250k, 5% above). For block deals this is usually cheaper than residential + surcharge. Worth modelling both ways.
- Mixed-use rate. Properties combining residential and genuine commercial use are taxed at non-residential rates. HMRC has been aggressive on mixed-use claims since 2019; a paddock, a flat above a shop, or a garden let to neighbours are all areas where HMRC has successfully reassessed. Get a tax specialist opinion if mixed-use saves you meaningful tax.
- Property trader relief. If you're buying a property from a seller who is themselves buying a replacement property in a chain-break, a property-trading company can claim relief from SDLT on the purchase, subject to holding the property short-term and limits on occupation. Niche but useful for flip operators.
Getting the number right in your model
SDLT is one of the most common sources of "my deal looked good on paper" errors. Four rules keep you honest:
- Default to additional-property rates for any portfolio deal. Any buyer who owns a residential property anywhere in the world pays the 5% surcharge on the next purchase. The surcharge is refundable if the new property replaces a main residence sold within three years, but most developer deals don't meet that test.
- Companies and SPVs always pay the surcharge. There is no first-property exemption for a newly-formed SPV. The rule is "owned by a non-natural person" — the entity type alone triggers it.
- Check the cliff edges. £500k for FTB relief, £500k for the ATED 15% flat rate, £1.5m for the 12/17% top band. A £10k price swing around any of these can cost tens of thousands of pounds.
- Apply Scottish LBTT or Welsh LTT instead if the property is in Scotland or Wales. SDLT only covers England and Northern Ireland. LBTT and LTT have their own bands, their own thresholds, and their own additional-dwelling supplements — none of which mirror SDLT rates exactly.
Before you offer
Run the full acquisition cost through a deal model before you make the offer, not after solicitors send the engagement letter. SDLT + legals + survey + lender fees can add 7-10% to a portfolio deal's effective purchase price, and that's before refurbishment. The worst time to discover you miscounted SDLT is when the statutory payment window hits and the deal margin has already evaporated.
Model the whole deal — purchase, SDLT at the right buyer type, refurb, finance, GDV — in one pass. Run your deal through the 30-second Quick Check or use the SDLT calculator for the tax figure alone. Both cover 2025/26 rates, the October 2024 surcharge, and the FTB cliff edge.