How Stamp Duty Is Calculated (2026): The Bands, the Slice System & Worked Examples
Stamp duty isn’t one flat rate on the whole price — it’s charged in slices, like income tax, so you only pay each rate on the part of the price that falls in that band. Here are the current 2026 bands, exactly how the calculation works, and worked examples you can follow for your own purchase.
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Quick answer
Stamp Duty Land Tax (SDLT) in England and Northern Ireland is calculated on a “slice” basis — you pay a different rate on each portion of the purchase price, not one flat rate on the whole amount. For a standard residential purchase (a home mover, not a first-time buyer, not an additional property), the 2026 bands are: 0% on the first £125,000, 2% on £125,001–£250,000, 5% on £250,001–£925,000, 10% on £925,001–£1.5 million, and 12% above £1.5 million. So on a £400,000 home you pay nothing on the first £125,000, 2% on the next £125,000 (£2,500), and 5% on the final £150,000 (£7,500) — a total of £10,000. This progressive system means the top rate only ever applies to the slice of the price in that band, so two similarly-priced homes can have very different bills. These bands have applied since 1 April 2025, when the temporary raised threshold ended and the nil-rate band dropped back to £125,000 — and no further changes have been announced for 2026. First-time buyers and buyers of additional properties (second homes, buy-to-let) are calculated differently, with their own relief and surcharge respectively. SDLT must be filed and paid within 14 days of completion, usually handled by your solicitor. Scotland (LBTT) and Wales (LTT) have separate systems. This is general information, not tax advice. As of August 2026.
In this guide
The 2026 stamp duty bands
For a standard residential purchase in England and Northern Ireland — meaning you’re buying a home to live in, you’re not a first-time buyer, and you won’t own any other property after completion — these are the current bands, in force since 1 April 2025 and unchanged for 2026:
| Portion of purchase price | SDLT rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001 to £250,000 | 2% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1.5 million | 10% |
| Above £1.5 million | 12% |
These bands returned to their pre-2022 levels on 1 April 2025, when the temporary higher nil-rate threshold (£250,000) that had been in place since September 2022 expired and dropped back to £125,000. In practical terms, that means more buyers now pay stamp duty, and many pay more than they would have before that date. No further changes to these bands have been announced for 2026, so they’re the current baseline. Note these are for England and Northern Ireland only — Scotland uses Land and Buildings Transaction Tax (LBTT) and Wales uses Land Transaction Tax (LTT), both with their own different bands.
How the “slice” system works
The single most misunderstood thing about stamp duty
The most important point — and the one that causes the most confusion — is that you do not pay one rate on the whole purchase price. SDLT works exactly like income tax: it’s charged in slices, and each rate applies only to the portion of the price that falls within that band.
So if you buy a £300,000 home, you don’t pay 5% on the whole £300,000. You pay 0% on the first £125,000, 2% on the next £125,000, and 5% only on the final £50,000. This is why a common fear — “if I go £1 over a threshold, my whole bill jumps” — is wrong for standard purchases: crossing into a higher band only means the higher rate applies to the money above that threshold, not retrospectively to everything below it.
Because of this slice system, the effective rate (the total tax as a percentage of the price) is always lower than the top band rate you reach. On a £400,000 home the top band is 5%, but the effective rate is just 2.5%, because most of the price is taxed at 0% and 2%.
Worked examples (standard purchase)
Here’s the calculation worked through for several standard (home-mover) purchase prices, so you can follow the method for your own:
| Purchase price | SDLT payable | Effective rate |
|---|---|---|
| £200,000 | £1,500 | 0.75% |
| £250,000 | £2,500 | 1.00% |
| £300,000 | £5,000 | 1.67% |
| £400,000 | £10,000 | 2.50% |
| £500,000 | £15,000 | 3.00% |
| £750,000 | £27,500 | 3.67% |
| £950,000 | £38,750 | 4.08% |
Take the £400,000 example step by step, since it’s a common price point:
- 0% on the first £125,000 = £0
- 2% on the next £125,000 (the slice from £125,001 to £250,000) = £2,500
- 5% on the remaining £150,000 (the slice from £250,001 to £400,000) = £7,500
- Total SDLT = £10,000
You can apply exactly this method to any price: split the price into the band slices, apply each rate to its slice, and add them up. For the exact figure on your specific purchase, HMRC provides an official calculator, and MoneyHelper’s stamp duty calculator is a reliable free tool. It’s worth factoring this figure into your budget early, as it forms a significant part of the overall cost of buying a house — whether you’re a first-time buyer or moving home.
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What the tax is charged on
A crucial and frequently misunderstood point: stamp duty is charged on the full purchase price of the property, not on your cash contribution or deposit. It’s a tax on the transaction, not on the money you personally put in. So if you buy a £300,000 home with a £30,000 deposit and a £270,000 mortgage, your SDLT is calculated on the full £300,000 — the mortgage portion doesn’t reduce it. The same applies to a new build or an older home — it’s the agreed price that counts. This catches some buyers out, who assume the tax only applies to their deposit or equity. It doesn’t: whether you’re a cash buyer or borrowing most of the price, the SDLT calculation base is the agreed purchase price. This is one reason it’s important to understand how much you can borrow and budget the stamp duty as a separate, upfront cash cost you’ll need on top of your deposit — you can’t add it to your mortgage in the normal way, so it has to come from your own funds at completion, alongside your deposit.
First-time buyers & additional properties
The bands above are for standard home movers. Two groups are calculated differently, and each has its own dedicated guide:
- First-time buyers get relief: they pay 0% on the first £300,000 and 5% on the portion from £300,001 to £500,000, on purchases up to £500,000 (above that, no relief applies and standard rates take over). This relief is an all-or-nothing “cliff edge” at £500,000, which is worth understanding carefully — our guide to first-time buyer stamp duty covers exactly what you’ll pay and the cliff-edge trap.
- Buyers of additional properties (second homes, buy-to-let) pay a 5% surcharge on top of every band (increased from 3% in October 2024). This applies even while you still own your main home during a move, with a refund possible in some cases — see our guide to buy-to-let and second-home stamp duty for how the surcharge works and when it applies.
There’s also a 2% non-resident surcharge for buyers who aren’t UK residents, added on top of the applicable rates. But for the core question of “how is stamp duty calculated,” the slice method above is the foundation that all of these build on — relief and surcharges simply adjust the rates applied to each slice.
When and how you pay
Stamp duty is a lump sum paid to HMRC after your purchase completes. The key rules:
- Deadline: you must file an SDLT return and pay within 14 days of completion. Late filing attracts automatic penalties.
- Who handles it: your solicitor or conveyancer almost always files the return and pays the SDLT on your behalf as part of the completion process, adding the amount to the funds they collect from you. You’ll provide the money as part of your completion balance.
- It’s upfront cash: because it’s due within days of completion and can’t normally be added to your mortgage, you need the stamp duty amount available as cash, on top of your deposit and other fees.
Because working out SDLT by hand can be error-prone — especially where surcharges, first-time buyer relief, shared ownership or leaseholds are involved — it’s always worth confirming the exact figure with your solicitor, and using HMRC’s official calculator for the final amount. But understanding the slice method means you can estimate your own bill with confidence when budgeting a purchase.
The bottom line
Stamp duty is calculated in slices, not as a flat rate: for a standard purchase you pay 0% up to £125,000, then 2%, 5%, 10% and 12% on each higher portion of the price. The top rate only ever applies to the slice within that band, so your effective rate is always lower than the headline band — a £400,000 home costs £10,000, an effective 2.5%. It’s charged on the full purchase price (not your deposit), it’s due as upfront cash within 14 days of completion, and first-time buyers and additional-property buyers follow adjusted versions of the same method. Work out your slices, add them up, and confirm the figure with your solicitor — and budget it in early, because it’s real money you’ll need at completion.
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How stamp duty is calculated: FAQs
How is stamp duty calculated in 2026?
Stamp Duty Land Tax in England and Northern Ireland is calculated on a slice basis, meaning you pay a different rate on each portion of the purchase price rather than one flat rate on the whole amount. For a standard residential purchase in 2026, you pay 0% on the first £125,000, 2% on £125,001 to £250,000, 5% on £250,001 to £925,000, 10% on £925,001 to £1.5 million, and 12% above £1.5 million. To calculate it, split the price into these band slices, apply each rate to its slice, and add them up. For example, a £400,000 home costs £0 on the first £125,000, £2,500 on the next £125,000, and £7,500 on the final £150,000 — £10,000 in total.
Do you pay stamp duty on the whole purchase price?
Not at one flat rate — but the calculation is based on the whole purchase price, split into bands. You don’t pay a single percentage on the entire price; instead, each rate applies only to the portion of the price within its band, like income tax. However, the tax is charged on the full purchase price of the property, not on your deposit or cash contribution. So a £300,000 home bought with a £30,000 deposit and £270,000 mortgage still has SDLT calculated on the full £300,000 — the mortgage doesn’t reduce it. The slice system means your effective rate (total tax as a percentage) is always lower than the top band rate you reach.
What are the stamp duty bands for 2026?
For a standard residential purchase in England and Northern Ireland in 2026, the bands are: 0% on the first £125,000, 2% on the portion from £125,001 to £250,000, 5% on £250,001 to £925,000, 10% on £925,001 to £1.5 million, and 12% on anything above £1.5 million. These have applied since 1 April 2025, when the temporary raised nil-rate threshold of £250,000 (in place from September 2022) expired and returned to £125,000. No further changes have been announced for 2026, so these are the current baseline. First-time buyers and additional-property buyers have their own adjusted rates. Scotland and Wales use different systems (LBTT and LTT).
How much stamp duty will I pay on a £400,000 house?
For a standard purchase (a home mover, not a first-time buyer, not an additional property), a £400,000 house in England or Northern Ireland attracts £10,000 in stamp duty in 2026. This breaks down as 0% on the first £125,000 (£0), 2% on the next £125,000 (£2,500), and 5% on the remaining £150,000 (£7,500), totalling £10,000 — an effective rate of 2.5%. If you’re a first-time buyer, you’d pay less thanks to first-time buyer relief. If it’s an additional property such as a second home or buy-to-let, you’d pay £30,000 because of the 5% surcharge added to every band. Always confirm the exact figure with your solicitor.
Can I add stamp duty to my mortgage?
Not in the normal way. Stamp duty is due to HMRC within 14 days of completion and is charged on the full purchase price, so it’s an upfront cash cost you need available on top of your deposit and other fees. You can’t simply bolt it onto your mortgage as an extra amount. In some cases, buyers with substantial equity effectively free up cash by borrowing slightly more against the property value, but that increases your loan and depends on affordability and loan-to-value limits — it’s not the same as adding the tax to the loan. The practical planning point is to treat stamp duty as separate upfront cash you’ll need at completion, and budget for it early.
When do you pay stamp duty?
You must file a stamp duty return and pay the tax within 14 days of your purchase completing. In practice, your solicitor or conveyancer almost always handles this for you as part of the completion process — they file the SDLT return with HMRC and pay the tax from funds you provide, usually collected as part of your completion balance. Late filing attracts automatic penalties, so it’s important your solicitor has everything needed in good time. Because the deadline is so soon after completion and the tax can’t normally be added to your mortgage, you need the stamp duty amount available as cash at completion, alongside your deposit and other costs.
- GOV.UK — Stamp Duty Land Tax (official rates and rules)
- MoneyHelper — Stamp Duty calculator
Important information
nextmove is an introducer, not a tax adviser, solicitor, conveyancer or lender. This article is general information only and does not constitute tax, legal or financial advice. Stamp Duty Land Tax rates, bands, reliefs and surcharges described apply to England and Northern Ireland only (Scotland uses LBTT and Wales uses LTT) and are correct to the best of our knowledge as of 2026, but tax rules change with Budgets and legislation. The worked examples are illustrative; always confirm your exact liability with your solicitor or HMRC’s official calculator. We introduce you to FCA-regulated, whole-of-market mortgage brokers, and we may receive a fee or commission for doing so.
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