What are property taxes in the UK?

In the UK, property tax is devolved which means that property tax is different in England, Scotland, Wales and Northern Ireland. 

• England – Stamp Duty Land Tax (SDLT) 
• Northern Ireland – Stamp Duty Land Tax (SDLT) 
• Scotland – Land and Building Transaction Tax (LBTT) 
• Wales – Land Transaction Tax (LTT) 

If you’re after more information on tax payable on property income, check out our guide to tax on rental income. 

Under all schemes, there are different thresholds and rates for: 

• Residential property 
• Non-residential property 
• Those purchasing an additional residential property 
• First-time buyers 
• Leasehold properties 

If you’re considering purchasing a property, being aware of the property tax you may have to pay is essential in managing your cashflow and not having any unexpected bills. 

Stamp Duty Land Tax (SDLT) 

SDLT is payable by those purchasing property or land in England and Northern Ireland. 

The SDLT amount is calculated based on the purchase price, and additional charges apply when buying second homes.  

There are available SDLT reliefs which you may be eligible for. 

Residential properties and SDLT 

For residential properties, SDLT rates and thresholds increase from 1st April 2025 to: 

Purchase price	SDLT rate
£0 - £125,000	0%
£125,001 - £250,000	2%
£250,001 - £925,000	5%
£925,001 - £1.5m	10%
£1.5m+	12%

Thresholds for first-time buyers are different, and these as well as the residential SDLT rates to 31st March 2025, may be of interest. 

If you’re buying a residential home which means you own more than one, i.e. a property to rent out, or a second home, you’ll usually have to pay a 5% surcharge on top of the SDLT rate. 

Non-residential SDLT 

Non residential property, including commercial property, property not suitable to be lived in and agricultural land and mixed property (i.e. has both residential and non-residential elements) have different rates for SDLT. 

There are also different rates for freehold sales and transfers and new leasehold sales and transfers. The rate of SDLT on freehold and leaseholds is based on Net Present Value (NPV) which is the total rent over the life of the lease. 

Land and Building Transaction Tax (LBTT) 

LBTT is payable when purchasing land or property, both residential and non-residential, and non-residential leases in Scotland. Additional charges apply for second homes. 

The amount of LBTT depends on the purchase price of the land or property, and for leases depends on the NPV of rent you pay and any other chargeable consideration including lease premium. 

Residential properties and LBTT 

Purchase price	LBTT rate
£0 - £145,000	0%
£145,001 - £250,000	2%
£250,001 - £325,000	5%
£325,001 - £750,000	10%
£750,000+	12%

Thresholds for first-time buyers are different, and if you’re buying a residential home which means you own more than one, i.e. a property to rent out, or a second home, you’ll usually have to pay Additional Dwellings Supplement (ADS). 

Non-residential properties and LBTT 

For LBTT non-residential property can include: 

• commercial property i.e. shops or offices 
• property not suitable to be lived in 
• forests 
• agricultural land part of a working farm or with agricultural use 
• 6 or more residential properties bought in a single transaction 
• buildings used as: 
  • a home or providing residential accommodation for children 
  • a hall of residence for students in further or higher education 
  • a home or for persons in need of personal care due to age, disability, drug or alcohol dependency or mental health conditions 
  • a hospital or hospice 
  • a prison or similar establishment 
  • a hotel or inn or similar establishment 

Land Transaction Tax (LTT) 

LTT is payable when purchasing a property in Wales and is calculated based on the purchase price. If you’re purchasing a home, but already own one you’ll be subject to the higher residential tax rates which were increased from 11th December 2024. 

Residential properties and LTT 

The main residential rates of LTT (effective from 10th October 2022) are: 

Purchase price	LTT rate
£0 - £225,000	0%
£225,001 - £400,000	6%
£400,001 - £750,000	7.5%
£750,001 - £1.5m	10%
£1.5m+	12%

The higher residential rates, were updated for transactions from 11th December 2024, and may be applicable to those purchasing second homes and companies and trusts buying residential properties. 

Non-residential properties and LTT 

When you purchase non-residential property, both freehold and leasehold, then you’ll need to consider different rates and thresholds for LTT. 

If you pay rent on the grant of a new lease, may also be taxed. The tax is calculated based on the NPV. 

What to consider when purchasing a property 

Property taxes can be very complicated. When investing in property it’s important to get all the advice and support you need. There may be factors to consider that could reduce your tax charge. There’s a lot more to consider too, including income tax, capital gains tax, making tax digital. We have a wealth of guidance for landlords on our website. 

How TaxAssist Accountants can help 

Reach out to our expert team for more help with your property tax. Call us on 01480 592002 or use our online contact form. 

First published 7 Feb 2025

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This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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