UK Stamp Duty Thresholds to Watch
The band cliffs where bidding £1 extra can cost thousands.
Standard (non-FTB) thresholds
- £250,000: SDLT turns on. £250,000 = £0 tax. £250,001 = effectively £0 tax on the first £250k, 5% on everything above.
- £925,000: marginal rate steps up from 5% to 10%.
- £1,500,000: marginal rate steps up from 10% to 12%.
First-time buyer cliff edges
- £425,000: FTB relief threshold. Below this, 0% SDLT.
- £625,000: ALL FTB relief disappears. Bidding at £625,001 triggers standard-band SDLT on the entire amount — a cliff edge worth thousands. Bid £625,000 or less, or bid decisively above and budget the standard SDLT.
Additional property surcharge
A 5% surcharge applies on top of standard SDLT when buying an additional property (second home, buy-to-let). This applies even if the property is cheaper than your current home. The surcharge is on the entire purchase price, not just the slice above a threshold.
How marginal SDLT differs from average SDLT
SDLT is charged in slices, like income tax. On a £500,000 home you don't pay 5% on the whole £500,000 — you pay 0% on the first £250,000 and 5% on the next £250,000 = £12,500. The average rate is 2.5% even though the top marginal rate is 5%. The cliff edges only really bite at the FTB £625,000 threshold (where relief is lost on the entire amount) and where the surcharge applies.
Negotiation leverage at the cliff edges
If a property is listed just above a threshold (say £260,000 with a £250,000 cliff for non-FTB), you can sometimes negotiate the price below the cliff in exchange for paying full asking on fixtures/fittings outside the SDLT base — within HMRC rules. Talk to a conveyancer before structuring this; sham splits are aggressively pursued.
Scotland and Wales differ
Scotland uses Land and Buildings Transaction Tax (LBTT) with different bands (nil to £145,000, then 2%, 5%, 10%, 12%). Wales uses Land Transaction Tax (LTT) with bands at £225,000, £400,000, £750,000, £1.5m. The thresholds and rates listed above apply to England and Northern Ireland only.