Stamp Duty on Luxury Property: Every Rate, Surcharge & Exemption Explained (2026)

How Much Stamp Duty Will You Pay on a Million Pound Home?

Stamp Duty Land Tax is the single largest transaction cost when buying luxury property in England and Northern Ireland. On a £3 million home, you could pay anywhere from £271,250 to over £480,000 depending on your circumstances. The difference comes down to whether this is your first property, an additional home, or whether you are a UK resident. We have put together this comprehensive guide because stamp duty in the luxury market is not as simple as plugging a number into a calculator — there are surcharges, reliefs, and planning opportunities that can save or cost you hundreds of thousands of pounds.

Standard SDLT Rates (2026)

The current Stamp Duty Land Tax rates for residential property in England and Northern Ireland are structured in bands. You pay 0% on the first £125,000, then 2% on the portion between £125,001 and £250,000, 5% on the portion between £250,001 and £925,000, 10% on the portion between £925,001 and £1,500,000, and 12% on everything above £1,500,000. This means on a £1 million property, total SDLT is £41,250. On £2 million, it is £163,750. On £5 million, it is £523,750. On £10 million, it is £1,123,750. These are significant sums, and they are only the starting point.

The Additional Dwelling Surcharge (5%)

If you already own property anywhere in the world and you are purchasing an additional residential property in England or Northern Ireland, a 5% surcharge applies across all bands. This includes buy-to-let purchases, second homes, pieds-à-terre, and investment properties. On a £3 million purchase, this adds £150,000 to the bill, bringing total SDLT from £271,250 to £421,250. There is an important exception: if you are replacing your main residence and sell your previous home within 36 months, you can claim a refund of the surcharge. For luxury buyers who are upgrading from one primary residence to another, this relief is crucial and worth discussing with your solicitor early in the process.

The Non-UK Resident Surcharge (2%)

Non-UK residents pay an additional 2% surcharge on top of all other SDLT rates. You are classed as non-UK resident for SDLT purposes if you have not been present in the UK for at least 183 days in the 12 months before the purchase. This surcharge stacks with the additional dwelling surcharge, meaning a non-UK resident buying a second home pays 7% above standard rates across all bands. On a £5 million property, the combined surcharges add £350,000 to the base SDLT of £523,750, for a total of £873,750. The non-resident surcharge can be reclaimed if you become UK tax resident within two years of the purchase — a detail many international buyers are not told about upfront.

Quick Reference: SDLT on Common Luxury Price Points

Here is what you will pay at the most common luxury price points. At £1 million: £41,250 standard, £91,250 with additional dwelling surcharge, £111,250 as non-resident with surcharge. At £2 million: £163,750 standard, £263,750 with surcharge, £303,750 as non-resident with surcharge. At £3 million: £271,250 standard, £421,250 with surcharge, £481,250 as non-resident with surcharge. At £5 million: £523,750 standard, £773,750 with surcharge, £873,750 as non-resident with surcharge. At £10 million: £1,123,750 standard, £1,623,750 with surcharge, £1,823,750 as non-resident with surcharge.

SDLT Planning: Legitimate Ways to Reduce Your Bill

There are several legitimate strategies to manage stamp duty costs. Multiple Dwellings Relief allows buyers purchasing a property containing more than one dwelling (for example, a house with an annexed flat or separate staff quarters) to calculate SDLT based on the average price per dwelling rather than the total. This can produce significant savings on high-value properties. Shared ownership and first-time buyer relief are less relevant in the luxury market, but transfer of property between spouses or civil partners is exempt from SDLT entirely, which can be useful in estate planning. We always advise buyers to discuss SDLT planning with their solicitor and tax adviser before making an offer. The time to optimise is before exchange, not after.

Frequently Asked Questions

How much is stamp duty on a £2 million house?

Stamp duty on a £2 million property is £163,750 at standard rates. If this is an additional property, the total rises to £263,750 with the 5% surcharge. Non-UK residents purchasing an additional home would pay approximately £303,750 including both surcharges.

Can I avoid the additional dwelling surcharge?

If you are replacing your main residence, you can claim a refund of the 5% surcharge provided you sell your previous main home within 36 months of the new purchase. You must pay the surcharge upfront and claim it back. For genuine upsizers, this effectively removes the surcharge entirely.

When do I pay stamp duty?

SDLT must be paid within 14 days of completion. Your solicitor will typically handle the payment and filing of the SDLT return on your behalf as part of the conveyancing process. Late payment incurs automatic penalties and interest.