Stamp Duty Land Tax (SDLT) for residents and non-residents: key insights
TheHub@Druce- •
- 11 Mar 2025
Stamp Duty Land Tax (SDLT) for residents and non-residents: key insights
Residents
For UK residents, the SDLT rates depend on the price of the property being purchased. Below are the standard SDLT rates for residents:
| Property Price | Standard Rate |
|---|---|
| Up to £125,000 | 0% |
| £125,001 - £250,000 | 2% |
| £250,001 - £925,000 | 5% |
| £925,001 - £1.5m | 10% |
| Over £1.5m | 12% |
For first-time buyers, there is a relief available where no SDLT is paid on the first £425,000 of the property price, and a 5% rate is applied on the portion from £425,001 to £625,000.
If you are purchasing a second home or a buy-to-let property, an additional 3% surcharge applies to the above rates. For example, if the property price is £300,000, the standard SDLT would be £5,000, but the additional 3% surcharge would mean an extra £9,000, total £14,000.
Non-Residents
Non-residents purchasing property in the UK are subject to a higher SDLT rate. In addition to the standard rates, non-residents must pay a 2% surcharge on the purchase price of residential properties, which was introduced in 2021. Below is a breakdown of how the SDLT rates look for non-residents:
| Property Price | Standard Rate | 2% Non-Resident Surcharge | Total SDLT |
|---|---|---|---|
| Up to £125,000 | 0% | 2% | 2% |
| £125,001 - £250,000 | 2% | 2% | 4% |
| £250,001 - £925,000 | 5% | 2% | 7% |
| £925,001 - £1.5m | 10% | 2% | 12% |
| Over £1.5m | 12% | 2% | 14% |
This surcharge applies to all non-resident buyers, including individuals and companies, purchasing residential properties in England, Wales, and Northern Ireland.
New Non-Dom Tax Law
In addition to the SDLT surcharge, non-residents in the UK will also be affected by the non-domiciled (non-dom) tax changes. In April 2025, the UK government will begin taxing non-doms on their UK property holdings as though they are UK-domiciled for tax purposes. This means that foreign buyers who have previously used non-dom status to avoid paying UK inheritance tax on properties held in the UK will no longer benefit from this exemption.
This change will impact non-residents who hold UK property through offshore structures, such as trusts or companies. The new rules are likely to affect the property ownership strategies of high-net-worth individuals and foreign investors in particular.
Investment Strategy Advice
We recommend working with tax experts to develop a strategy that minimizes tax liability and maximizes investment returns. For instance, non-residents may want to consider using UK-based property holding structures, which may provide more tax-efficient strategies for managing both SDLT and long-term capital gains taxes.
Additionally, long-term investment in high-demand areas, such as central London and major regeneration zones, can offer the potential for solid capital appreciation, especially as the market stabilizes. Diversification in property types—balancing residential with commercial or mixed-use properties—can also provide added resilience to your portfolio.
Druce has partnered with Gerald Edelman, experts in tax and property advice, to provide exclusive consultation for our clients. If you have any concerns or need tailored advice regarding SDLT, non-dom regulations, or investment strategies, please contact us for expert guidance.
Data Source: Gerald Edelman
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