If a buyer purchases a property or land in England or Northern Ireland above a certain price, they must pay Stamp Duty Land Tax (SDLT). This article sets out how SDLT is calculated when buying property in the UK, and also covers the upfront costs of buying, such as solicitor’s fees and survey fees.
Four Situations That Require Stamp Duty Land Tax
The following four actions all require Stamp Duty to be paid:
- Buying a freehold property
- Buying a new or existing leasehold property
- Buying a property through a shared-ownership scheme
- Transferring land or property in exchange for payment, such as taking on a mortgage or buying a share of a home
The Tax Threshold
SDLT has a threshold — only the portion of the price above the threshold is subject to SDLT. If a property is bought for less than the threshold, no SDLT is due.
The current SDLT nil-rate threshold for a residential property is £125,000 (from 1 April 2025).
The threshold for non-residential land and property is £150,000.
Residential Stamp Duty Land Tax Rates
UK Stamp Duty Land Tax is a progressive tax, with different rates applying at different price bands. See the current table below.
| Property Price | Rate |
|---|---|
| £0 – £125,000 | 0% |
| £125,001 – £250,000 | 2% |
| £250,001 – £925,000 | 5% |
| £925,001 – £1,500,000 | 10% |
| Above £1,500,000 | 12% |
*These are the standard bands, before any first-time-buyer relief or surcharges (such as the overseas buyer rate below).*
A separate first-time-buyer relief applies on top of this table: eligible first-time buyers pay 0% up to £300,000, and 5% on the portion from £300,001 to £500,000. The first-time-buyer rate only applies to buyers who have no other property anywhere in the world and whose purchase price is £500,000 or less. If, for example, you have previously owned a home in Hong Kong, you generally would not qualify for the first-time-buyer rate.
The Overseas Buyer Rate
The UK government currently charges overseas buyers an additional 2% Stamp Duty rate — from 1 April 2021, all overseas buyers, whether or not they are a first-time buyer, must pay an extra 2% Stamp Duty on top when buying property in the UK.
Example
Mr. Chan is not a UK resident and has never purchased property anywhere else in the world. He buys a residential unit in the UK for £300,000. In this case, Mr. Chan is treated as a non-UK-resident first-time buyer. Because the price falls entirely within the first-time-buyer relief band (0% up to £300,000), no standard SDLT is due on the purchase itself. The 2% overseas buyer surcharge, however, applies to the full £300,000 price regardless of the relief. So Mr. Chan’s Stamp Duty Land Tax in this case is £300,000 × 2% = £6,000.
The actual amount of Stamp Duty Land Tax due can also be affected by other factors — whether the property is leasehold or freehold, whether it is purely residential or mixed residential/commercial use, and so on, each of which is calculated differently. The UK government provides an online Stamp Duty Land Tax calculator that can work out the actual amount due.
Solicitor’s Fees
In a UK property transaction, most of the paperwork is handled by a solicitor, who assists the buyer with all the legal matters in the buying process and also helps manage some of the money passing hands. A solicitor’s work generally falls into four stages: preparation, exchange of contracts, completion, and after-sales matters. So buyers should also budget for solicitor’s fees when buying in the UK — typical UK solicitor’s fees run around £1,500–£3,000, and buyers should set aside this amount when purchasing.
Survey Fees
If you are buying a second-hand (resale) property, it needs to be inspected by a locally recognized, professionally qualified surveyor. A single surveyor carries out the inspection, visiting the property, examining it, and preparing a report on its condition. Buyers usually have the survey carried out after the seller has accepted their offer. Before instructing a surveyor, buyers should check whether the surveyor is a member of one of the UK’s two main recognized bodies: RICS (the Royal Institution of Chartered Surveyors) or RPSA (the Residential Property Surveyors Association). Survey fees depend on the size of the property and the transaction price, and generally run to around £400–£800.
RICS – Royal Institution of Chartered Surveyors: https://www.rics.org/uk/
RPSA: https://www.rpsa.org.uk/
Mortgage Arrangement Fee and Valuation Fee
Whether a buyer takes out a UK mortgage through a Hong Kong bank or a UK bank, the bank will charge the buyer an arrangement fee, generally 0.5%–1% of the loan amount, and some banks will also charge the applicant a valuation fee, generally around £300–£500.
Summary
Buying in the UK can of course reduce the upfront outlay through a mortgage, but beyond the deposit on the purchase price, there are all of the costs above to budget for, and some of them, such as solicitor’s fees and survey fees, also attract UK VAT on top. Buyers should therefore set aside a larger budget for upfront costs to cover the various service fees. We recommend consulting a professional accountant or property agent at the outset of your investment.
Have a question about this guide? Leave a comment below, or ask Zagdim directly.
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