Stamp Duty Exemptions and Reliefs in 2026 — What Could Reduce Your Bill?

Stamp Duty Land Tax (SDLT) — the basics

Stamp Duty Land Tax (SDLT) applies to purchases of land and property in England and Northern Ireland. Scotland has Land and Buildings Transaction Tax (LBTT) and Wales has Land Transaction Tax (LTT) — similar in principle but with different rates and reliefs.

Standard residential SDLT rates for 2026/27:

Additional dwellings surcharge: +5% on all bands if you are purchasing an additional residential property (e.g. a second home or buy-to-let).

The reliefs and exemptions below can significantly reduce — or eliminate — SDLT on a transaction.

First-time buyer relief

This is the most widely used SDLT relief. First-time buyers purchasing a property in England or Northern Ireland for £625,000 or less benefit from:

• 0% SDLT on the first £425,000
• 5% SDLT on the portion from £425,001 to £625,000

If the purchase price exceeds £625,000, the relief is withdrawn entirely. The standard residential rates apply to the full price with no relief.

Who qualifies as a first-time buyer?

• You must never have owned residential property in the UK or abroad (either outright or through a leasehold)
• The property must be your main residence (not a buy-to-let)
• If buying jointly, all purchasers must be first-time buyers
• Inherited property: if you have inherited a property, you are not a first-time buyer even if you never lived there

Multiple Dwellings Relief — ABOLISHED from June 2024

Multiple Dwellings Relief (MDR) allowed buyers purchasing two or more dwellings in a single transaction to calculate SDLT on the average price per dwelling rather than the total. This resulted in significantly lower SDLT bills for bulk purchases.

MDR was abolished for transactions completing on or after 1 June 2024.

If you purchased multiple dwellings before 1 June 2024 and MDR applied, the old rules still govern that transaction. But all purchases completing from June 2024 onwards use standard rates applied to the total consideration.

The abolition primarily affects:

• Investors buying multiple units in a single block
• Portfolio purchases
• Purchases of properties with separate annexes that previously qualified

Group relief (companies within a corporate group)

Companies within a group (where one company holds at least 75% of the shares in another, or both are 75% subsidiaries of a common parent) can transfer property between them at 0% SDLT using Group Relief.

This applies to:

• Transfers of investment properties between group companies
• Property reorganisations within a corporate structure
• Moving development land between entities in the same group

Clawback risk

Group Relief can be clawed back if, within 3 years of the transfer:

• The transferee company leaves the group
• The property is sold out of the group as part of a linked transaction

If clawback applies, SDLT becomes payable as if no relief had been claimed. Legal advice is essential before relying on group relief.

Charity relief

Transfers of property to a qualifying charity are eligible for SDLT relief — the rate is 0% where the purchaser is a charity and the property is to be used for charitable purposes.

The charity must:

• Be recognised by HMRC as a charity for tax purposes
• Intend to hold or use the property for charitable purposes

Mixed-charity purchases (where a charity and a non-charity buy jointly) receive partial relief proportional to the charity's share.

Compulsory Purchase Order relief

Where a property is acquired under a Compulsory Purchase Order (CPO) by a local authority or government body, SDLT may not apply or may be reduced depending on the transaction structure. The acquiring authority typically handles SDLT implications as part of the CPO process.

Leasehold enfranchisement

Leasehold enfranchisement (purchasing the freehold of your property) is a separate SDLT treatment. The key points:

• Collective enfranchisement: When flat owners collectively purchase the freehold, SDLT is calculated on the premium paid, using residential rates.
• Individual lease extension: Statutory lease extensions (under the Leasehold Reform Act) do not typically attract SDLT on the premium paid — the transaction is structured to fall outside SDLT's scope in many cases.
• Freehold purchase above threshold: A premium above the standard nil-rate threshold (£250,000) triggers SDLT at standard residential rates.

Mixed-use (non-residential) SDLT rates

Where a property has both residential and non-residential elements, it may qualify for non-residential SDLT rates, which are substantially lower:

Non-residential SDLT rates:

Compare the residential 5% rate on the £250k-£925k band — the non-residential maximum of 5% applies above £250k, and residential 10% and 12% bands do not exist in the non-residential scale.

Properties that may qualify for mixed-use treatment:

• Shop with residential flat above
• Pub with living accommodation
• Farm with a farmhouse (often qualifies if the agricultural land is significant)
• Bed and breakfast with owner's accommodation
• Commercial property with residential annexe

The mixed-use designation applies to the whole transaction — you cannot cherry-pick. But if your property genuinely has commercial elements, the SDLT saving can be substantial.

Example: A property with a ground-floor shop and upstairs flat purchased for £800,000:

• Residential rate: £26,250 SDLT
• Non-residential rate: £28,500 SDLT — actually slightly higher in this case

But at £400,000 total:

• Residential: £7,500 SDLT
• Non-residential: £5,000 SDLT — a £2,500 saving

Whether mixed-use applies requires specialist analysis. HMRC has challenged many claims, and incorrect claims result in SDLT assessments plus interest and penalties.

Annexe and granny flat — the subsidiary dwelling rule

Where a main dwelling has a self-contained annexe, the position depends on whether the annexe is:

1. Subsidiary to the main dwelling (value under one-third of the total) — eligible for residential SDLT rates without the additional 3% (now 5%) surcharge on the subsidiary portion.
2. Not subsidiary — may qualify for Multiple Dwellings Relief treatment (but MDR is now abolished for completions from June 2024).

The key test post-MDR abolition: if the annexe is subsidiary and used as part of a single dwelling, it is treated as part of the main residential purchase and no additional surcharge applies.

Right to Buy

Right to Buy allows eligible council tenants to buy their home at a discount. SDLT is calculated on the discounted purchase price (what you actually pay), not the market value. Since Right to Buy discounts can be substantial (up to £136,400 in London in 2026, or £102,400 outside London), the SDLT base may be low enough to fall under the standard nil-rate threshold.

First-time buyer relief applies on Right to Buy purchases if you meet the other criteria.

SDLT planning — what to check before completing

If your transaction involves any of the following, seek specialist SDLT advice before exchange:

• A property with a commercial element
• An annexe, granny flat, or separate building in the grounds
• Multiple dwellings in a single transaction
• A purchase within a corporate group structure
• A charity as purchaser
• A property where the vendor has a connected relationship

SDLT is calculated and paid within 14 days of completion by submitting a land transaction return to HMRC. Amendments are possible within 12 months of the filing deadline.

Related calculators

Use the stamp duty calculator to calculate SDLT on your purchase including first-time buyer relief and the additional dwellings surcharge.

The mortgage calculator helps you understand the full cost of purchasing a property including your deposit, SDLT, and monthly mortgage payments.