SDLT Rates and Reliefs in 2026-27: A Practical Guide for UK Property Buyers

Key takeaway

For 2026-27 property purchases in England and Northern Ireland, the standard residential SDLT 0% band runs to £125,000, with rates of 2% to £250,000, 5% to £925,000, 10% to £1.5 million and 12% above. The surcharge on additional dwellings (second homes and buy-to-lets) doubled to 5% from October 2024, and a 2% surcharge applies to non-UK resident buyers. The most valuable planning levers remain mixed-use classification, Multiple Dwellings Relief, the replacement-of-main-residence rules and company-purchase structuring — all of which can legitimately cut SDLT by tens of thousands on high-value transactions.

Detailed explanation

Stamp Duty Land Tax (SDLT) is charged on the purchase of land and property in England and Northern Ireland. For residential property, the tax is calculated on a slab basis — each portion of the price falls into a different band rather than the whole price being taxed at the top marginal rate.

Standard residential SDLT rates 2026-27

Price band	Rate
£0 – £125,000	0%
£125,001 – £250,000	2%
£250,001 – £925,000	5%
£925,001 – £1,500,000	10%
Over £1,500,000	12%

These thresholds reverted on 1 April 2025 — the temporary £250,000 0% band that applied from September 2022 ended, returning to the £125,000 threshold.

First-time buyer relief

First-time buyers purchasing a home costing up to £500,000 pay 0% on the first £300,000 and 5% on the portion from £300,001 to £500,000. Above £500,000, standard rates apply and the relief is lost entirely. The relief threshold reduced from £425,000 to £300,000 on 1 April 2025.

Additional dwelling surcharge (ADS)

Buyers of additional residential property — second homes, holiday homes and buy-to-lets — pay an extra 5% on top of the standard rates. This surcharge increased from 3% to 5% for transactions with an effective date on or after 31 October 2024. A replacement-of-main-residence claim can recover the surcharge where the buyer sells a previous main residence within three years.

Non-resident surcharge

Non-UK residents purchasing UK residential property pay an additional 2% surcharge on top of the standard and higher rates. Combined with the 5% ADS, a non-resident buying a second home can face SDLT of up to 19%.

Company purchases

Companies purchasing residential property worth £500,000 or more are generally subject to the 15% flat rate, with the 5% ADS and 2% non-resident surcharge potentially applying on top. High-value dwellings held in companies may also be caught by the Annual Tax on Enveloped Dwellings (ATED).

Legislation

SDLT is charged under the Finance Act 2003, Schedule 4ZA (residential rates) and Schedule 4A (higher rates for additional dwellings). The 5% ADS took effect under the Finance Act 2025 provisions announced at the October 2024 Budget. The non-resident surcharge is found in Schedule 9A FA 2003. First-time buyers' relief is at Schedule 6ZA FA 2003. Multiple Dwellings Relief is at Schedule 6B FA 2003.

Practical example

A buyer purchasing a £1.2 million house as a main residence in 2026-27 pays SDLT of approximately £63,250 (0% on the first £125,000, 2% on the next £125,000, 5% on £675,000, 10% on £275,000). If the same property is acquired as a second home, the ADS adds roughly £60,000, bringing the total to around £123,250.

Where the purchase is a single building containing three self-contained flats for £1.2 million, Multiple Dwellings Relief can apply the residential rates to each dwelling individually (average price £400,000) and then apply a 12% cap on the overall rate — frequently reducing the SDLT bill by 40-60% on multi-unit acquisitions.

Common mistakes

1. Assuming the 0% band still applies to £250,000. It reverted to £125,000 in April 2025 — many online calculators still default to the old threshold.
2. Failing to claim replacement-of-main-residence relief. Buyers who sell a previous main home within three years can reclaim the 5% ADS — a frequently missed refund worth up to £60,000 on a £1.2m purchase.
3. Treating a mixed-use property as fully residential. Where a transaction includes both residential and non-residential elements (for example a shop with a flat above), the non-residential rates (top rate 5%) can apply to the whole — a significant saving that is often overlooked.
4. Missing the MDR cap. Even where MDR applies, the effective rate is capped at 1% above the rate that would have applied without relief, so the saving is real but not unlimited.

How Newshams can help

Newshams Tax Advisers provides specialist SDLT planning on residential, commercial and mixed-use transactions across the UK. From relief claims and refund recovery to company-purchase structuring and HMRC enquiry defence, we help buyers and their conveyancers get SDLT right — and recover it where it has been overpaid. Contact us on +44 (0) 800 211 8657 or enquiries@newshams.com.