How Stamp Duty Is Calculated
Stamp duty (called SDLT in England, LBTT in Scotland, LTT in Wales, and Land Transfer Duty in Australia) is calculated on a progressive scale — similar to income tax. You pay each rate only on the portion of the purchase price within that band, not on the full price.
UK SDLT Rates 2025 (England & Northern Ireland)
0% on the first £250,000, 5% on £250,001–£925,000, 10% on £925,001–£1.5M, 12% on everything above £1.5M. First-time buyers pay 0% on the first £425,000 and 5% on £425,001–£625,000 (above £625,000, no relief applies). An additional 3% surcharge applies to additional/second properties and buy-to-let purchases.
Australian Stamp Duty
Each Australian state has its own duty rates and concessions. Victoria and NSW typically have the highest rates for expensive properties. Most states offer first home buyer grants or concessions — for example, Victoria exempts first home buyers from duty on properties up to $600,000 and applies a concession up to $750,000. Queensland provides a first home concession up to $550,000.
Strategies to Reduce Stamp Duty
First home buyers should always check eligibility for concessions before purchasing. In England, buying below the £425,000 threshold as a first-timer saves up to £8,750. In Australia, timing a purchase to qualify for state-specific thresholds and grants can save tens of thousands. Some investors use family trust structures or company ownership to manage stamp duty liability — always seek professional advice.
Frequently Asked Questions
What is stamp duty in the UK?
Stamp Duty Land Tax (SDLT) in England and Northern Ireland is a tax paid when buying property. Rates for 2025: 0% up to £250,000, 5% on £250,001–£925,000, 10% on £925,001–£1.5M, 12% above £1.5M. First-time buyers pay 0% up to £425,000 and 5% on £425,001–£625,000. Scotland has Land and Buildings Transaction Tax (LBTT); Wales has Land Transaction Tax (LTT) — both with different rates.
Do first-time buyers pay stamp duty?
First-time buyers in England and Northern Ireland benefit from relief: 0% on the first £425,000 and 5% on £425,001–£625,000. Above £625,000 the standard rates apply with no first-time buyer relief. In Scotland, first-time buyers pay 0% up to £175,000 under LBTT. In Wales, first-time buyers get no additional relief beyond the standard LTT bands.
What is stamp duty in Australia?
Australian states each set their own stamp duty (land transfer duty). Rates vary significantly by state — Victoria, NSW and Queensland have the highest rates. Most states offer first home buyer concessions or exemptions up to certain property values. Rates are calculated on the purchase price on a progressive scale, similar to income tax brackets.
When do you pay stamp duty?
In the UK, SDLT must be paid within 14 days of completing a property purchase (the date contracts complete, not exchange). Your solicitor or conveyancer typically handles this. In Australia, duty must be paid before or at settlement — usually the settlement date. Failure to pay on time results in interest charges.
Is stamp duty different for investment properties?
Yes. In the UK, buyers of additional residential properties (buy-to-let, second homes) pay a 3% surcharge on top of standard SDLT rates. In Australia, some states apply higher duty rates for foreign investors or on certain investment properties. This makes stamp duty a significant cost to factor into property investment calculations.