Stamp Duty Explained: What Will You Actually Pay?

Stamp Duty Land Tax is often the biggest cost of moving after the deposit — yet most buyers only discover what they owe late in the process. Here’s how it actually works.

1. It’s banded, like income tax

You don’t pay one rate on the whole price — you pay each band’s rate only on the slice of the price within it. Currently: nothing up to £125,000, 2% to £250,000, 5% to £925,000, 10% to £1.5m and 12% above.

2. First-time buyers get relief

If every buyer is a first-time buyer and the price is £500,000 or less, you pay nothing up to £300,000 and 5% on the remainder — a saving of up to £6,250 on typical Birmingham prices.

3. Second homes cost more

Buying an additional property — a buy-to-let or second home — adds a 5% surcharge on the entire price, on top of the standard bands.

4. A worked example

A home mover buying at £350,000 pays: £0 on the first £125,000, £2,500 on the next £125,000, and £5,000 on the final £100,000 — £7,500 in total. Try your own numbers with our calculator below.