At current residential rates, SDLT is charged on slices at 0% to £125,000, 2% to £250,000, 5% to £925,000, 10% to £1.5 million and 12% above £1.5 million. A £1 million house therefore does not pay 12% on the full purchase price.
You may be viewing a London house that feels perfect, while your solicitor is asking whether the purchase is your main residence, an additional property or part of a portfolio. Then the SDLT estimate arrives, and the figure is much larger than a simple percentage calculation suggested. For a £1.2 million home, the tax depends on how the price is distributed across the bands, and the answer changes again if higher rates apply.
That's why the question “how much is stamp duty for a house?” needs more than a rate table. SDLT is a progressive slice tax, so each portion of the price is charged at the rate for its own band. The purchase structure, your existing property ownership and the timing of completion can all affect the cash you need.
This guide works through the calculation in plain English, then applies it to luxury London price points. It also explains the additional-property regime, common misunderstandings and the practical checks to complete before you exchange contracts. For discreet property guidance alongside the tax planning process, you can learn more about Luxury Homes London's advisory service.
By the end, you'll understand how to estimate the standard bill, identify when a surcharge may apply and ask your conveyancer the right questions before committing to a property.
Table of Contents
- Understanding Stamp Duty Land Tax and How It Works
- Current SDLT Rate Bands and How to Calculate Your Bill
- Surcharges and Reliefs That Change How Much You Pay
- Worked Examples for Luxury London House Prices
- Common Misconceptions About Stamp Duty Costs
- Next Steps to Confirm and Pay Your Stamp Duty
Understanding Stamp Duty Land Tax and How It Works
Stamp Duty Land Tax, usually called SDLT, is a tax charged on a residential property purchase in England and Northern Ireland. The buyer is responsible for the tax, and the liability is connected to the transaction rather than to the mortgage or deposit.
The calculation uses the purchase price, but SDLT isn't a flat percentage applied to every pound. It works like income tax. Your first portion of income can fall into one band, while the next portion falls into another. Property prices work in a similar way: each slice of the house price is taxed separately.
When the buyer pays
SDLT is normally dealt with as part of completion. The return and payment must be made within 14 days of completion, as set out in HMRC's SDLT guidance. Your conveyancer usually handles the filing and payment, but the money still comes from you and must be available promptly.
That timing matters for a London purchase because SDLT sits alongside the deposit, legal costs, survey fees, financing charges and any immediate works. It isn't deducted gradually through your mortgage payments. You need to budget for it as an upfront transaction cost.
A useful distinction is the difference between the marginal rate and the effective rate. The marginal rate is the percentage charged on the final slice of the price. The effective rate is the total SDLT divided by the purchase price. A property may reach the 10% or 12% marginal band while its overall effective rate remains lower, because earlier slices were charged at lower rates.
Practical rule: Never multiply the entire London purchase price by the highest rate shown in the table. First divide the price into slices, then calculate each slice.
The official residential guidance is available through Luxury Homes London as part of its London property information, but your conveyancer should confirm the regime for your particular transaction.
Current SDLT Rate Bands and How to Calculate Your Bill
The standard residential rates for England and Northern Ireland use the following slices. The table shows the tax charged if a complete slice were taxable at that rate.
| Price Slice | SDLT Rate | Tax on Full Slice |
|---|---|---|
| Up to £125,000 | 0% | £0 |
| £125,001 to £250,000 | 2% | £2,500 |
| £250,001 to £925,000 | 5% | £33,750 |
| £925,001 to £1.5 million | 10% | £57,500 |
| Above £1.5 million | 12% | No fixed upper amount |
These current bands are published on the GOV.UK residential SDLT rates page. The page was updated on 12 September 2026, so it's sensible to verify the rates close to exchange rather than relying on an old property article.
The calculation method
Take a purchase price and work upwards through the table.
- Ignore the first £125,000 for standard SDLT, because that slice is charged at 0%.
- Apply 2% to the slice between £125,000 and £250,000, where the full band is taxable.
- Apply 5% to the portion from £250,000 to £925,000, or to the part of that band reached by your purchase price.
- Apply 10% to the portion from £925,000 to £1.5 million, if the price enters that band.
- Apply 12% to any amount above £1.5 million.
For example, on a £500,000 standard-rate purchase, the tax is:
- £0 on the first £125,000.
- £2,500 on the next £125,000.
- £12,500 on the £250,000 portion from £250,000 to £500,000.
The total is therefore £15,000. The 5% rate applies only to the relevant slice, not to the whole £500,000.
Why London buyers need the distinction
Many higher-value London homes reach the upper bands, but reaching a band doesn't reprice the earlier slices. A £1 million purchase has tax calculated at 0%, 2%, 5% and 10% across its different portions. It doesn't incur 12% on the full amount because the 12% band begins only above £1.5 million.
The government's stamp duty rates and allowances publication also reflects the historical development of the system. The standard £125,000 nil-rate band returned from 1 April 2025 after temporary threshold changes expired, which is one reason older calculations may no longer match a current estimate.
For a first estimate, you can use HMRC's online calculator after identifying the property type and buyer status. Treat the result as a budgeting guide until your conveyancer confirms the legal facts, especially where ownership, residency or company structures are involved.
Surcharges and Reliefs That Change How Much You Pay
The standard table is only the starting point. The same London house can produce a different SDLT liability depending on whether you're replacing your main residence, buying an additional home, purchasing through a company or qualifying for a relief.
For an additional residential property, the higher-rate bands are 5%, 7%, 10%, 15% and 17%, replacing the standard rates for the relevant slices. GOV.UK states that these rates can apply where the purchase isn't a replacement of a main residence. The additional charge is particularly important for buyers who already own a home, landlords, portfolio buyers and people purchasing a second London residence.
A decision matrix for the buyer
| Buyer Situation | Rate Set Applied | Key Impact |
|---|---|---|
| Replacing your main residence | Standard residential rates, subject to the transaction facts | The ordinary slice calculation may apply |
| Buying an additional residential property | Higher rates of 5%, 7%, 10%, 15% and 17% | More cash is needed at completion |
| Non-UK resident buyer | Potential non-resident rules may apply | Residency must be assessed separately |
| Company or corporate buyer | Special corporate rules may apply | Ownership structure can materially alter the liability |
| Eligible first-time buyer | First-time buyer relief may be available | Eligibility depends on the buyer and property conditions |
The non-resident position deserves careful review. A buyer may be international, UK resident, or connected to other circumstances that require specialist analysis. Don't assume that nationality alone answers the question. Your solicitor or tax adviser should establish the relevant residence position and how it interacts with any additional-property charge.
Company purchases also need individual advice. A corporate acquisition can involve rules that differ from a personal owner-occupier purchase, and the intended use of the property matters. Buying through a company isn't a universal SDLT solution.
Reliefs aren't automatic
First-time buyer relief is conditional. It isn't available because the property is modestly priced or because the buyer hasn't owned a London home before. The buyer, property and transaction must meet the applicable requirements, so confirmation should come before you rely on the relief in your budget.
The key question is often structural: what is this property in relation to the buyer's existing ownership? The higher-rate regime can affect the total by tens of thousands of pounds, which may change the offer you can make or the liquidity you retain after completion. A specialist source discussing the additional-property calculation is the SDLT guidance for landlords and portfolio buyers.
Before exchanging contracts, ask your conveyancer to confirm the exact rate set, whether any surcharge applies and whether a relief or repayment mechanism is relevant.
Worked Examples for Luxury London House Prices
Luxury purchases become easier to assess when the tax is shown as a sequence of slices rather than a single headline percentage. The examples below use the standard residential rates and the higher-rate regime for an additional property. They're useful for budgeting, but your conveyancer must confirm the final liability.
A £925,000 London house
At the top of the 5% band, the standard calculation is:
- £0 on £125,000 at 0%.
- £2,500 on £125,000 at 2%.
- £33,750 on £675,000 at 5%.
The standard total is £36,250. For an additional property, the corresponding calculation is:
- £6,250 on the first £125,000 at 5%.
- £8,750 on the next £125,000 at 7%.
- £67,500 on the remaining £675,000 at 10%.
That produces an additional-property total of £82,500. The difference is £46,250, which could affect whether an investor proceeds, renegotiates or changes the timing of a purchase.
A £1.5 million London house
The standard calculation adds the 10% slice:
- £0 on the first £125,000.
- £2,500 on the next £125,000.
- £33,750 on the portion from £250,000 to £925,000.
- £57,500 on the portion from £925,000 to £1.5 million.
The standard total is £93,750. Under the additional-property rates, the slices become:
- £6,250 at 5%.
- £8,750 at 7%.
- £67,500 at 10%.
- £86,250 on the £575,000 upper slice at 15%.
The additional-property total is £168,750. The extra tax is £75,000, before considering any separate issue such as non-resident treatment or corporate ownership.
A £2.5 million London house
For the standard calculation, the first four slices total £93,750. The remaining £1 million above £1.5 million is charged at 12%, adding £120,000. The standard total is therefore £213,750.
For an additional property, the first four higher-rate slices total £168,750. The final £1 million is charged at 17%, adding £170,000, which gives an additional-property total of £338,750.
A buyer moving into a £925,000 home, an investor considering a £1.5 million asset and an international buyer seeking a £2.5 million second home face very different cash requirements. The London property search and advisory service can help buyers consider purchase costs alongside location, property quality and transaction strategy.
This video provides another visual way to follow the slice calculation:
Common Misconceptions About Stamp Duty Costs
The most expensive mistake is treating SDLT as a slab tax. Under a slab system, crossing a threshold might apply a new rate to the entire price. SDLT uses slices instead, so only the portion inside a band receives that band's rate.
A higher band doesn't reset the calculation. It only applies to the slice that reaches it.
Thresholds can also change. The standard £125,000 nil-rate band returned on 1 April 2025 after temporary changes expired, as covered in the government's historical SDLT guidance. An online article written under an earlier regime may therefore produce an outdated estimate.
London buyers also sometimes confuse England's SDLT system with the property taxes used in Scotland or Wales. Those are separate regimes, so a calculator or article designed for another part of the UK won't answer the question for an English property.
Finally, a property price doesn't tell the whole story. An owner-occupier replacing a main residence may face the standard calculation, while a second-home buyer can face the higher-rate schedule. Buyers who need a second opinion can review client feedback for Luxury Homes London, then still ask their conveyancer to validate the tax position.
Next Steps to Confirm and Pay Your Stamp Duty
Start with a reliable estimate, then move quickly to transaction-specific advice. The HMRC calculator can help you model the purchase once you know the price and broad buyer category, but it won't replace a conveyancer's review of ownership, residency and company details.
Use this short checklist:
- Confirm the property jurisdiction: Make sure the house is in England or Northern Ireland and that SDLT is the relevant tax.
- Identify your buyer status: Establish whether the purchase replaces your main residence or adds to your residential holdings.
- Check special circumstances: Tell your adviser about overseas residence, company ownership, trusts or any planned disposal of another home.
- Budget completion funds: Keep the SDLT amount available alongside the deposit and other completion costs.
- Verify the deadline: SDLT payment and filing are due within 14 days of completion, according to GOV.UK's SDLT payment guidance.
- Review the figure before exchange: Ask your conveyancer to confirm the rate set, total bill and any possible relief.
For buyers who want a coordinated search and transaction process, Luxury Homes London's registration page offers a route to discuss suitable London property opportunities. A clear SDLT estimate should form part of your offer strategy, not an unpleasant discovery after terms have been agreed.
Luxury Homes London can help you source carefully selected London homes, assess opportunities and handle negotiation through completion with discreet adviser support. Visit Luxury Homes London to discuss your brief and build SDLT into a realistic purchase plan before you make an offer.