Understanding Stamp Duty for Home Movers

How stamp duty land tax works for home movers

Stamp duty land tax (SDLT) is a tax you pay when you buy a property or land over a certain price in England and Northern Ireland. If you're moving home – selling your current main residence and buying a new one – you'll usually pay SDLT on the purchase price of your new home. It's a one-off payment, due within 14 days of completion, and your solicitor or conveyancer will normally handle it for you.

The amount you pay depends on the price, whether you're a first-time buyer (unlikely if you're moving), and whether you own other properties. Because you're moving, you're not a first-time buyer, but you may still face the additional property surcharge if you buy before you sell. The good news is that you can often reclaim that surcharge later.

The standard rates you'll pay

For completions on or after 1 April 2025, the standard residential SDLT rates in England and Northern Ireland are:

• 0% on the first £125,000
• 2% on the portion from £125,001 to £250,000
• 5% on the portion from £250,001 to £925,000
• 10% on the portion from £925,001 to £1.5 million
• 12% on anything above £1.5 million

These are marginal rates – you only pay the higher percentage on the part of the price that falls into each band. For example, if you buy a home for £300,000, you pay nothing on the first £125,000, 2% on the next £125,000 (£2,500), and 5% on the remaining £50,000 (£2,500). That's a total of £5,000.

If you're buying a leasehold property, SDLT applies to the purchase price only, not the ground rent or service charges. Shared ownership has its own rules, but that's less common for home movers.

First-time buyer relief – why it likely doesn't apply to you

First-time buyer relief can significantly reduce the SDLT bill for those buying their first home. From April 2025, first-time buyers pay no SDLT on the first £300,000 and 5% on the portion from £300,001 to £500,000. If the purchase price exceeds £500,000, they lose the relief entirely and pay standard rates.

As a home mover, you've owned a property before, so you won't qualify for this relief. Even if you've never actually lived in a property you owned – for example, if you inherited one – you're still not a first-time buyer for SDLT purposes. It's worth checking the exact definition if you're unsure, but for most movers, standard rates apply.

The additional property surcharge and how to reclaim it

If you own another property – even if you're selling it – you may have to pay a 5% surcharge on top of the standard rates when you buy your new home. This applies if you own a property anywhere in the world and you're not replacing your main residence immediately. The surcharge is added to each band, so it increases your bill noticeably.

However, there's a valuable relief for home movers. If you buy a new main home and sell your previous main home within three years, you can claim a refund of the 5% surcharge. You'll need to pay it upfront at completion, then apply to HMRC for a refund once the sale goes through. Your solicitor can help with this – it's a straightforward process, but you must keep evidence of the sale.

To avoid the surcharge entirely, you could sell your old home before buying the new one. That's not always practical, especially in a chain. If you do buy first, budget for the extra 5% and plan to reclaim it.

Regional differences and practical steps

Stamp duty works differently in Scotland and Wales. In Scotland, you pay Land and Buildings Transaction Tax (LBTT), with a nil rate band of £145,000 and different rates. In Wales, it's Land Transaction Tax (LTT), with a nil rate band of £225,000. If you're moving within or between these nations, check the relevant rules.

For England and Northern Ireland, here's what to do:

• Budget early. Factor SDLT into your moving costs. Use an online calculator or ask your solicitor for an estimate.
• Check your surcharge status. If you own another property, you'll likely pay 5% extra. Plan to reclaim if you sell within three years.
• Confirm the completion date. Rates change on 1 April 2025, so timing matters if you're near that date.
• Let your solicitor handle it. They'll submit the return and payment to HMRC within 14 days of completion.

Moving home is exciting, but stamp duty can be a sting. With a little planning, you can avoid surprises and keep your move on track. If in doubt, speak to your conveyancer – they deal with this every day.