If you’re buying a home in England or Northern Ireland, Stamp Duty Land Tax (SDLT) is something you’ll need to factor in. It’s a tax paid to the government when you buy property or land above a certain price. Since the SDLT system works in slices (similar to income tax), the total amount depends on your purchase price and whether you’re a first-time buyer, buying your main home, or purchasing an additional property.
The thresholds changed on 1 April 2025. The 0% rate now applies only up to £125,000, reduced from £250,000. That means more buyers will now need to pay SDLT on homes that previously fell under the tax-free limit.
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Many buyers specifically want to know how much stamp duty on a 400k house would cost, as this price point often sits right where the main tax bands start to make a difference.
What Is Stamp Duty Land Tax (SDLT)?
Stamp Duty Land Tax is a one-off tax charged when you buy property or land in England or Northern Ireland. It applies to freehold, leasehold, and shared ownership purchases. Scotland and Wales have their own systems: Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT).
The amount you owe depends on the property price, where it’s located, whether you’re a UK resident, and if it’s your main home or an additional property. The current SDLT structure uses progressive bands, so different portions of your property’s value are taxed at different rates.
Calculating the Stamp Duty on a £400,000 House
Let’s look at how much SDLT you’d pay on a £400,000 home in England or Northern Ireland.
If it’s your main residence and you already own property, you’ll pay the standard residential rate.
Standard Buyer SDLT Calculation (England/NI):
- Up to £125,000 – 0% = £0
- £125,001 to £250,000 – 2% = £2,500
- £250,001 to £400,000 – 5% = £7,500
Total SDLT: £10,000
SDLT Rates for Standard Buyers (Effective 1 April 2025)
- 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%
First-Time Buyer Relief on a £400,000 House
First-time buyers benefit from a discount, but only if everyone buying has never owned property before (including inherited or overseas property).
Rates for First-Time Buyers (England/NI):
- Up to £300,000: 0%
- £300,001 to £500,000: 5% on the portion above £300,000
Calculation for a £400,000 Property:
- Up to £300,000 – 0% = £0
- £300,001 to £400,000 – 5% = £5,000
Total SDLT: £5,000
The Additional Property Surcharge
If the £400,000 property is a second home or a buy-to-let, you’ll pay higher rates. The additional property surcharge adds 5% on top of standard rates.
Additional Property Rates (England/NI):
- Up to £125,000: 5%
- £125,001 to £250,000: 7%
- £250,001 to £925,000: 10%
- £925,001 to £1.5 million: 15%
- Above £1.5 million: 17%
Calculation for a £400,000 Additional Property:
- Up to £125,000 – 5% = £6,250
- £125,001 to £250,000 – 7% = £8,750
- £250,001 to £400,000 – 10% = £15,000
Total SDLT: £30,000
Temporary Ownership and Refunds
If you buy your next home before selling your current one, you’ll need to pay the additional property surcharge. However, if you sell your old home within three years, you can claim that surcharge back from HMRC.
If the timing between selling and buying leaves you short on funds, secured loan brokers like KIS Finance can help you understand short-term finance options. They also provide a Stamp Duty Calculator to work out your exact costs.
Does the Location of the Property Matter?
Yes. Scotland and Wales use their own tax systems with different rates.
Wales: Land Transaction Tax (LTT)
LTT Calculation for a £400,000 Property (Effective 10 October 2022):
- Up to £225,000 – 0% = £0
- £225,001 to £400,000 – 6% = £10,500
Total LTT: £10,500
Scotland: Land and Buildings Transaction Tax (LBTT)
LBTT Calculation for a £400,000 Property:
- Up to £145,000 – 0% = £0
- £145,001 to £250,000 – 2% = £2,100
- £250,001 to £325,000 – 5% = £3,750
- £325,001 to £400,000 – 10% = £7,500
Total LBTT: £13,350
Other Factors That Can Affect the Rate
Non-UK Residents:
If you’ve spent fewer than 183 days in the UK during the 12 months before purchase, you’ll be classed as a non-UK resident and pay a 2% surcharge on top of the normal rates.
Property Type:
Non-residential or mixed-use properties (for example, shops with attached flats) use different tax bands. Buying six or more residential properties in one go also counts as a commercial transaction.
Property Value:
First-time buyer relief does not apply to homes worth more than £500,000. For properties above £1.5 million, the rate rises to 12% for the portion that exceeds that threshold.
When Do You Pay Stamp Duty?
Stamp Duty must be paid within 14 days of completion. Your solicitor usually handles the paperwork, but you’re responsible for making sure the payment is submitted on time. SDLT is paid as one lump sum, and late payments can lead to penalties and interest.
Frequently Asked Questions
1. Can I pay Stamp Duty in installments?
No. SDLT must be paid in full within 14 days of completion.
2. What if only one buyer is a first-time buyer?
Both buyers must qualify as first-time buyers to receive the discount. If one person has owned property before, the relief doesn’t apply.
3. Do I pay SDLT on inherited property?
No. SDLT isn’t charged on inherited or gifted property where no money changes hands.
4. Can I add Stamp Duty to my mortgage?
Not directly. SDLT must be paid as a lump sum, though you could adjust your deposit to cover it and borrow slightly more if your lender agrees.
5. Can I get a refund if I sell my old home after buying a new one?
Yes. If you paid the additional property surcharge, you can claim a refund once your old home sells, as long as it’s within three years. The refund request must be sent to HMRC, usually within three months of the sale.
