Do I pay stamp duty on a leasehold flat in London?

Yes, stamp duty applies to leasehold purchases in the same way as freehold. You pay SDLT on the purchase price of the lease using the standard residential rates. If you're also paying a substantial ground rent (over £1,000 annually for non-residential or £250 for residential leases over 21 years), an additional calculation applies to the net present value of those rent payments, though this rarely affects typical London flats with peppercorn or low ground rents.

Can I avoid the 3% stamp duty surcharge if I sell my current home quickly?

Yes, but you must complete the sale of your previous main residence within three years of purchasing the new one. You'll initially pay the higher 3% surcharge, then apply to HMRC for a refund once your old home sells. The refund claim must be submitted within 12 months of the sale or three years of the new purchase, whichever is later, and HMRC typically processes refunds within several weeks of receiving your application.

What happens if I buy jointly with someone who already owns a property?

If any buyer named on the purchase already owns a residential property anywhere in the world, all buyers pay the 3% higher rate surcharge on every band. Similarly, for first-time buyer relief, all named buyers must qualify individually; if even one co-buyer has owned property before, none of you can claim the relief and you'll pay standard rates.

Is stamp duty different for new-build properties in London?

No, stamp duty rates for new-build homes are identical to existing properties. However, first-time buyers can still claim relief on new builds up to £625,000, and some developers offer incentives (such as contributing towards stamp duty) as part of sales packages. Additionally, certain new-build schemes like shared ownership have specific SDLT treatments that may reduce initial liability.

How much is stamp duty on a £500,000 flat as a first-time buyer?

A first-time buyer purchasing a £500,000 property pays nothing on the first £425,000, then 5% on the remaining £75,000, totalling £3,750. The same property purchased by a home mover would incur £12,500 (nothing on the first £250,000, then 5% on £250,000), and an additional-property buyer would pay £27,500 with the 3% surcharge applied across all bands.

Where can I find accurate sold prices to estimate stamp duty in my area?

HM Land Registry publishes sold prices for all registered property transactions in England and Wales, searchable by postcode or address on gov.uk. This data shows actual completion prices, not asking prices, giving you a reliable basis for estimating what you'll pay. You can then use a stamp duty calculator UK tool with those figures to model your likely liability before making offers.

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How Much is Stamp Duty in London?

By Seymont London · 17 July 2026

A London interior photographed for Seymont London

Stamp Duty Land Tax (SDLT) is payable on most property purchases in London. As of the current tax year, you'll pay nothing on the first £250,000 for standard purchases, or £425,000 if you're a first-time buyer, then tiered rates up to 12% on amounts over £1.5 million. Additional properties attract a 3% surcharge on every band. The amount you pay depends on your purchase price, buyer status and whether you already own property. London's property prices mean stamp duty often represents a substantial sum—sometimes the single largest upfront cost after your deposit. Understanding how much is stamp duty before you make an offer allows you to budget accurately and avoid unwelcome surprises at exchange. Our team has prepared this guide to explain the current rates, reliefs and practical steps to calculate your liability across the capital.

Understanding the Current Stamp Duty Land Tax Rates

Stamp Duty Land Tax operates on a tiered system, similar to income tax: you pay different rates on different portions of the purchase price, not a single rate on the whole amount. According to HMRC, the current residential rates for a single property purchase are 0% up to £250,000, 5% on the portion from £250,001 to £925,000, 10% on the portion from £925,001 to £1.5 million, and 12% on anything above £1.5 million.

If you already own a property and are purchasing an additional home—whether as a second home, buy-to-let investment or London base whilst retaining a property elsewhere—you'll pay an extra 3% on top of each band. This means the effective rates become 3%, 8%, 13% and 15% respectively. The higher rate surcharge applies even if your existing property is overseas or held in a trust.

First-time buyers benefit from targeted relief: you pay nothing on the first £425,000 and 5% on the portion between £425,001 and £625,000, provided the property costs £625,000 or less. If the price exceeds £625,000, you lose the relief entirely and pay the standard rates. Given that the median first-time buyer price in many London boroughs sits close to or above this threshold, understanding whether you qualify can save—or cost—you thousands.

These rates are set by HM Treasury and reviewed regularly, so we always recommend checking the latest figures on gov.uk or using a stamp duty calculator UK tool before finalising your budget. Policy changes, especially around thresholds, have been frequent in recent years.

Who Qualifies as a First-Time Buyer for Stamp Duty Relief?

To benefit from stamp duty for first time buyers relief, both you and anyone else you're buying with must never have owned an interest in a residential property anywhere in the world. HMRC's definition is strict: even if you inherited a share of a family home decades ago, or owned property abroad, you will not qualify.

The property itself must also meet conditions. It must cost £625,000 or less, and you must intend to occupy it as your main residence. Investment purchases, even by first-time buyers, do not qualify for relief. If you're buying jointly with someone who has owned property before, neither of you can claim the relief, and you'll pay the standard rates.

Shared ownership purchases have different rules. First-time buyers purchasing through shared ownership can claim relief on the initial share if the total property value is £625,000 or less, making this route particularly attractive in high-cost London boroughs. If you later 'staircase' to buy additional shares, different SDLT rules apply to those subsequent transactions.

Our team often sees buyers surprised by these definitions, especially couples where one partner previously owned. It's worth establishing your status early—ideally before you begin viewings—so you can calibrate your budget and search parameters accordingly.

Step One: Calculate Your Stamp Duty Liability

The most reliable way to determine how much stamp duty you'll pay is to use HMRC's official calculator or a reputable stamp duty land tax calculator that reflects current legislation. You'll need your purchase price, your status (first-time buyer, home mover or additional property purchaser), and whether the property is residential or mixed-use.

For a concrete London example: purchasing a £600,000 flat as a first-time buyer means you pay nothing on the first £425,000, then 5% on the remaining £175,000, totalling £8,750. The same property purchased by a home mover (replacing their main residence) would incur nothing on the first £250,000 and 5% on £350,000, totalling £17,500. A buyer with an existing property would add the 3% surcharge: 3% on £250,000 (£7,500) plus 8% on £350,000 (£28,000), totalling £35,500.

These differences are substantial, particularly in London where prices frequently exceed national averages. We maintain a <a href="/tools/stamp-duty-calculator">stamp duty calculator</a> on our site that you can use to model different scenarios, and a dedicated <a href="/tools/buy-to-let-stamp-duty-calculator">buy-to-let stamp duty calculator</a> for investment purchases.

Remember that stamp duty is payable within 14 days of completion, not exchange. Your solicitor will typically handle the submission and payment to HMRC, but you must have the funds available. Most lenders exclude stamp duty from mortgage calculations, so this sum needs to come from your cash reserves alongside your deposit and legal fees.

Step Two: Identify Potential Reliefs and Exemptions

Beyond first-time buyer relief, several other exemptions and reductions may apply. If you're replacing your main residence and own another property, you can reclaim the 3% higher rate surcharge provided you sell your previous home within three years of completing the new purchase. HMRC requires you to pay the higher rate initially, then apply for a refund once the sale completes—a process that can take several months.

Properties under £40,000 are exempt from stamp duty altogether, though such prices are virtually unknown in London. Transfers due to divorce or dissolution of civil partnership are also exempt, as are properties acquired as part of an estate (inheritance), although subsequent sales would trigger the usual liabilities.

Certain property types receive different treatment. Purchases of six or more residential properties in a single transaction are treated as non-residential and taxed at lower flat rates. Caravans, mobile homes and houseboats may be exempt if they're not permanently fixed to land. Mixed-use properties—for example, a flat above a shop you're buying as a single title—can be taxed at the more favourable non-residential rates, though you'll need clear evidence of the commercial element.

Annex properties and granny flats can be complex: if they're part of the same title as the main dwelling and not independently habitable, they're typically treated as a single unit. If they have a separate entrance, kitchen and bathroom, HMRC may deem them a second dwelling and apply higher rates. Our <a href="/buy">buying team</a> can introduce you to solicitors experienced in London property structures who can advise on your specific circumstances.

Step Three: Budget for the Total Upfront Cost

Stamp duty sits within a constellation of upfront costs. A realistic London purchase budget includes your deposit (typically 10–25% of the purchase price), stamp duty, legal fees (often £1,500–£3,000 plus disbursements), survey costs (£400–£1,500 depending on type and property value), mortgage arrangement fees, removal costs and a contingency for immediate repairs or furnishing.

For a £750,000 London home purchased by a mover, you might budget: £112,500 deposit (15%), £25,000 stamp duty, £2,500 legal fees, £800 survey, £1,000 mortgage fee and £2,000 removals and contingency, totalling around £143,800 in cash. First-time buyers on the same property would save £16,250 in stamp duty—a significant difference that could be redirected to a larger deposit or retained as an emergency fund.

Many buyers underestimate these costs or assume stamp duty is included in affordability calculations. Mortgage lenders assess affordability based on income multiples and outgoings, but they don't typically lend for stamp duty or fees. This means you need the full sum in accessible savings or gifts. Failure to budget accurately can delay completions, risk gazumping or—in the worst cases—cause transactions to collapse.

We recommend obtaining a formal <a href="/valuation">valuation</a> early in your search. Knowing realistic market values for your target areas and property types allows you to model stamp duty accurately and adjust your search criteria if the total upfront cost exceeds your available funds.

How Stamp Duty Affects London Buyers Across Boroughs

London's property prices vary dramatically by borough, and stamp duty liability tracks those variations closely. In boroughs where the median price sits below the first-time buyer relief threshold—historically outer zones like Barking & Dagenham, Bexley or parts of Croydon—eligible buyers can often avoid stamp duty altogether or pay minimal amounts, making homeownership significantly more accessible.

Conversely, in prime central boroughs such as Kensington & Chelsea, Westminster or Camden, where even modest flats often exceed £1 million, stamp duty bills frequently reach six figures. A £2 million property attracts £153,750 in stamp duty for a mover, or £213,750 for a second-home buyer. These sums represent substantial barriers and influence both buyer behaviour and market liquidity at different price points.

HM Land Registry publishes sold prices data, which provides transparency on recent transactions in your target area. Reviewing completed sales helps you understand not just asking prices but what buyers actually paid, allowing more accurate stamp duty modelling. When prices cluster around threshold boundaries—especially £250,000, £425,000, £625,000 and £925,000—even modest negotiation can shift you into a lower band and materially reduce your tax bill.

Our team works across all London boroughs and sees daily how stamp duty shapes buying decisions. Some clients adjust their search from a four-bedroom house just over a threshold to a three-bedroom property just beneath it. Others decide to buy a less expensive first home to benefit from relief, intending to move up the ladder once they've built equity. Understanding these dynamics allows you to make strategic choices aligned with your financial circumstances and long-term plans.

When and How to Pay Stamp Duty Land Tax

Stamp duty becomes payable on completion—the day you receive the keys and legal ownership transfers. You have 14 days from completion to file your SDLT return with HMRC and pay the tax. Miss this deadline and you'll face penalties and interest, starting at £100 and escalating if the delay continues.

In practice, your solicitor will handle the entire process. They'll calculate the exact liability, complete the SDLT return, submit it electronically to HMRC and pay the tax from funds you've transferred to them before completion. Once HMRC receives payment and processes the return, they issue a certificate (SDLT5) which your solicitor uses to register your ownership with HM Land Registry. Without this certificate, your purchase cannot be formally registered.

You'll need to transfer the stamp duty funds to your solicitor several days before completion, along with the balance of the purchase price, their fees and disbursements. Most solicitors provide a final completion statement a week or so beforehand, detailing every amount required. Ensure your bank can process same-day transfers for large sums—some impose limits or require advance notice for six-figure payments.

If you're reclaiming the 3% higher rate surcharge after selling a previous main residence, you'll need to apply separately to HMRC within 12 months of selling (or three years of the new purchase, whichever is later). Your solicitor can assist, but this is usually a distinct process requiring evidence of the sale and confirmation that the new property is your main residence.

Frequently asked

Do I pay stamp duty on a leasehold flat in London?: Yes, stamp duty applies to leasehold purchases in the same way as freehold. You pay SDLT on the purchase price of the lease using the standard residential rates. If you're also paying a substantial ground rent (over £1,000 annually for non-residential or £250 for residential leases over 21 years), an additional calculation applies to the net present value of those rent payments, though this rarely affects typical London flats with peppercorn or low ground rents.
Can I avoid the 3% stamp duty surcharge if I sell my current home quickly?: Yes, but you must complete the sale of your previous main residence within three years of purchasing the new one. You'll initially pay the higher 3% surcharge, then apply to HMRC for a refund once your old home sells. The refund claim must be submitted within 12 months of the sale or three years of the new purchase, whichever is later, and HMRC typically processes refunds within several weeks of receiving your application.
What happens if I buy jointly with someone who already owns a property?: If any buyer named on the purchase already owns a residential property anywhere in the world, all buyers pay the 3% higher rate surcharge on every band. Similarly, for first-time buyer relief, all named buyers must qualify individually; if even one co-buyer has owned property before, none of you can claim the relief and you'll pay standard rates.
Is stamp duty different for new-build properties in London?: No, stamp duty rates for new-build homes are identical to existing properties. However, first-time buyers can still claim relief on new builds up to £625,000, and some developers offer incentives (such as contributing towards stamp duty) as part of sales packages. Additionally, certain new-build schemes like shared ownership have specific SDLT treatments that may reduce initial liability.
How much is stamp duty on a £500,000 flat as a first-time buyer?: A first-time buyer purchasing a £500,000 property pays nothing on the first £425,000, then 5% on the remaining £75,000, totalling £3,750. The same property purchased by a home mover would incur £12,500 (nothing on the first £250,000, then 5% on £250,000), and an additional-property buyer would pay £27,500 with the 3% surcharge applied across all bands.
Where can I find accurate sold prices to estimate stamp duty in my area?: HM Land Registry publishes sold prices for all registered property transactions in England and Wales, searchable by postcode or address on gov.uk. This data shows actual completion prices, not asking prices, giving you a reliable basis for estimating what you'll pay. You can then use a stamp duty calculator UK tool with those figures to model your likely liability before making offers.