Understanding Stamp Duty and Property Taxes in 2026

Understanding the tax implications of buying property in London is crucial for budgeting and financial planning.

Stamp Duty Land Tax (SDLT)

SDLT is a tax paid when purchasing property over £250,000 (or £425,000 for first-time buyers). The tax is tiered, meaning you pay different rates on different portions of the property price.

Current SDLT Rates (2026)

For residential properties, the rates are:

• Up to £250,000: 0%
• £250,001 to £925,000: 5%
• £925,001 to £1.5 million: 10%
• Over £1.5 million: 12%

First-Time Buyer Relief

First-time buyers don't pay SDLT on properties up to £425,000. For properties between £425,001 and £625,000, you pay 5% on the amount above £425,000. Properties over £625,000 don't qualify for relief.

Additional Property Surcharge

If you're buying an additional property (second home, buy-to-let), you pay an extra 3% on top of standard SDLT rates on the entire purchase price.

Annual Tax on Enveloped Dwellings (ATED)

This applies to UK residential properties valued over £500,000 owned by companies. Most individual buyers don't need to worry about this.

Council Tax

Your ongoing council tax depends on your property's valuation band and your local authority. In London, this typically ranges from £800 to £3,000+ annually.

Capital Gains Tax (CGT)

If selling a property that isn't your main residence, you may owe CGT on profits. Your main residence is exempt from CGT. Current CGT rates are 18% (basic rate taxpayers) or 24% (higher rate taxpayers) on property gains.