On 1 April 2025, the UK government implemented the most significant revision to Stamp Duty Land Tax (SDLT) in three years. Standard rate thresholds reverted to pre-2022 levels, the additional dwellings surcharge remained at 5%, and the 2% non-resident surcharge remained in force. This guide explains every change, what it means in pounds and pence for overseas buyers, and what options are available to manage your liability.
Worst-case combined SDLT rate for a non-UK resident purchasing an additional residential property above £1.5m in England or Northern Ireland from 1 April 2025. Source: HMRC GOV.UK.
The Stamp Duty Land Tax changes of 1 April 2025 ended the temporary reliefs introduced in the September 2022 mini-Budget and returned the standard rate threshold structure to its pre-holiday levels. For overseas buyers, three elements of the SDLT system are relevant:
1. The standard nil-rate band reverted from £250,000 back to £125,000, meaning buyers now pay 2% SDLT on the portion of a property between £125,001 and £250,000 — a band that was previously nil-rated.
2. The first-time buyer relief threshold reverted from £425,000 to £300,000, and the maximum property price qualifying for first-time buyer relief reduced from £625,000 to £500,000.
3. The additional dwellings surcharge (for those buying a second home or investment property) had already been increased from 3% to 5% on 31 October 2024. This rate remained at 5% after 1 April 2025.
What did NOT change for overseas buyers: The 2% non-resident surcharge, introduced on 1 April 2021, remains in force at 2% and was not modified by the April 2025 changes. The test for whether a buyer is classified as non-UK resident for SDLT purposes also remains unchanged — it is based on physical presence of at least 183 days in the UK in the 12 months before completion.
The net effect of the April 2025 changes for an overseas investor purchasing an additional residential property is a higher SDLT bill at most price points, due to the restoration of the 2% standard rate on the £125,001–£250,000 band which had been nil-rated under the temporary holiday.
All SDLT applies only to properties in England and Northern Ireland. Scotland uses Land and Buildings Transaction Tax (LBTT). Wales uses Land Transaction Tax (LTT). Both have separate rate structures and are not covered in this guide.
The following rates apply to the purchase of a residential property in England or Northern Ireland by a UK-resident buyer who does not already own another residential property valued at £40,000 or more. These are the base rates to which surcharges are then added for non-residents, additional property owners, and companies.
| Property Value Band | Standard Rate (from 1 Apr 2025) | Previous Rate (23 Sep 2022–31 Mar 2025) | Change |
|---|---|---|---|
| Up to £125,000 | 0% | 0% | No change |
| £125,001 to £250,000 | 2% | 0% (holiday rate) | Restored to 2% |
| £250,001 to £925,000 | 5% | 5% | No change |
| £925,001 to £1,500,000 | 10% | 10% | No change |
| Above £1,500,000 | 12% | 12% | No change |
| Source: HMRC GOV.UK — Residential Property Rates (updated 1 April 2025). SDLT is charged progressively — each band applies only to the portion of the purchase price within it, not the whole price. | |||
SDLT is a progressive, banded tax. A buyer of a £300,000 property does not pay 5% on the entire £300,000. They pay 0% on the first £125,000, 2% on the next £125,000 (£125,001–£250,000), and 5% on the remaining £50,000. The total SDLT on a £300,000 property for a standard UK-resident buyer with no surcharges would be £5,000.
The 2% non-resident SDLT surcharge was introduced on 1 April 2021 and applies to all residential property purchases in England and Northern Ireland by buyers who are classified as non-UK resident for SDLT purposes. The April 2025 changes did not alter this surcharge. It remains at 2% and is charged on top of all other applicable SDLT rates — including the standard rates, the additional dwellings surcharge, and the higher rate for corporate bodies.
The surcharge applies equally to freehold and leasehold property, and also increases the SDLT payable on rents on the grant of a new lease for non-resident buyers. It does not apply to purchases of non-residential (commercial) property or mixed-use transactions, unless Multiple Dwellings Relief is claimed.
An important point for overseas investors: the SDLT non-resident test is entirely separate from the UK's Statutory Residence Test (SRT) used for Income Tax and Capital Gains Tax purposes. Nationality, citizenship, right to reside, visa status, and British National Overseas passport status are all irrelevant to the SDLT non-resident determination. The sole test is physical presence in the UK.
The surcharge also applies to certain UK-resident companies that are under the direct or indirect control of non-UK resident persons — meaning overseas investors who use a UK company as a purchase vehicle may still be subject to the surcharge if the company does not meet the Corporation Tax residence test.
| Property Value Band | Standard Rate | Non-Resident Surcharge | Non-Resident Rate |
|---|---|---|---|
| Up to £125,000 | 0% | +2% | 2% |
| £125,001 to £250,000 | 2% | +2% | 4% |
| £250,001 to £925,000 | 5% | +2% | 7% |
| £925,001 to £1,500,000 | 10% | +2% | 12% |
| Above £1,500,000 | 12% | +2% | 14% |
| Source: HMRC GOV.UK — Rates of Stamp Duty Land Tax for non-UK residents. These rates apply to a non-UK resident purchasing their only residential property — before any additional dwellings surcharge. | |||
The Higher Rate for Additional Dwellings (HRAD) applies when a buyer purchases a residential property and will own more than one residential property worth £40,000 or more — anywhere in the world — on completion. This surcharge applies regardless of whether the additional property is in the UK or overseas. For overseas investors purchasing a buy-to-let property in England, this surcharge almost always applies.
| Property Value Band | Standard Rate | Additional Dwellings Surcharge | Investor Rate (UK resident) |
|---|---|---|---|
| Up to £125,000 | 0% | +5% | 5% |
| £125,001 to £250,000 | 2% | +5% | 7% |
| £250,001 to £925,000 | 5% | +5% | 10% |
| £925,001 to £1,500,000 | 10% | +5% | 15% |
| Above £1,500,000 | 12% | +5% | 17% |
| Source: HMRC GOV.UK — Higher Rates of Stamp Duty Land Tax (from 31 October 2024). The surcharge applies to the whole purchase price, including the nil-rate band below £125,000. | |||
The additional dwellings surcharge applies to the whole purchase price from the first pound. Even the portion below £125,000 — which would be nil-rated under the standard rates — attracts the 5% surcharge when the property is an additional dwelling. The threshold for triggering the surcharge is ownership (or part-ownership) of another residential property anywhere in the world worth £40,000 or more. Spouses and civil partners are treated as a unit — if either spouse owns a property, both are treated as owning it for HRAD purposes.
For a non-UK resident purchasing an additional residential property — the most common profile for international investors — both the 2% non-resident surcharge and the 5% additional dwellings surcharge apply simultaneously on top of the standard SDLT rates. This produces a combined surcharge of 7% on every band of the purchase price.
The following worked examples illustrate how SDLT is calculated for typical overseas investor purchases from 1 April 2025. All figures use HMRC's progressive banding method. These are illustrative only — your actual liability depends on your specific circumstances. Always obtain a calculation from your solicitor before exchange.
Non-UK resident. No other properties owned anywhere. E.g. a cash buyer in UAE purchasing their first UK investment.
Pre–April 2025 equivalent: £5,000. Increase: £2,500.
Non-UK resident. Already owns property abroad (or in the UK). Additional dwellings surcharge applies.
Pre–April 2025 equivalent: £17,500. Increase: £2,500 due to threshold change.
Non-UK resident. Existing property owner. Standard SDLT + HRAD (5%) + NR surcharge (2%).
Pre–April 2025 equivalent: £35,500. Increase: £2,500 from nil-rate band restoration.
Non-UK resident. Existing property owner. Higher value purchase illustrating all five SDLT bands.
Effective SDLT rate on total purchase price: 10.33%. Pre-April 2025 equivalent: £59,500.
The SDLT non-resident test is a physical presence test only. It has no relationship to the UK's Statutory Residence Test (SRT) for Income Tax or Capital Gains Tax. You are classified as non-UK resident for SDLT purposes if you were not physically present in the UK for at least 183 days in the 12-month period immediately before your completion date.
A day in the UK counts if you are present in the UK at the end of that day (midnight). It does not need to be continuous. Days in Scotland and Wales count toward the 183-day total for the residence test, even though SDLT applies only to England and Northern Ireland.
The following are all irrelevant to the SDLT non-resident determination: your nationality, your citizenship, whether you have indefinite leave to remain, your visa type, your British National Overseas passport, your immigration status, and your status under the Statutory Residence Test for other taxes.
For joint purchases, the test applies to each buyer individually. If any one buyer is non-UK resident, the surcharge applies to the entire transaction — with the important exception of spouses and civil partners. If you are buying jointly with your spouse or civil partner and one of you is UK-resident under the 183-day test, both of you are treated as UK-resident and the non-resident surcharge does not apply.
For corporate buyers, the company is non-UK resident if it is not UK-resident for Corporation Tax purposes at the completion date. Special rules also catch UK-resident companies that are under the direct or indirect control of non-UK resident persons. A company-owning overseas investor should take specific legal and tax advice on this point before proceeding with a corporate purchase structure.
Buyers who pay the 2% non-resident surcharge at completion can claim a full refund of that surcharge if they subsequently meet the UK residency test within the window provided by HMRC. This is a significant and often overlooked provision — particularly relevant for buyers who relocate to the UK after purchasing.
How the window works: Suppose you completed the purchase of a UK property on 1 June 2025. Your two-year window runs from 2 June 2024 (364 days before completion) to 1 June 2027 (365 days after completion). If you can show that you spent 183 days in the UK in any continuous 365-day period falling within this window, you are entitled to a refund.
This means a buyer who completes on a buy-to-let property in June 2025 and then relocates to the UK for work in January 2026 — spending 183 days in the UK by June 2026 — would be entitled to reclaim the 2% surcharge from HMRC, provided they submit their claim within two years of their June 2025 completion date.
Joint purchases: For a joint purchase, a refund of the non-resident surcharge is only possible if all individual buyers satisfy the 183-day residency condition. The 365-day period can be different for each buyer, but every buyer must individually meet the requirement. If any one buyer does not satisfy the test, no refund is available for any of them.
HMRC's response time: HMRC typically responds to refund applications within 35 working days. All evidence of UK presence (passport stamps, travel records, employment contracts, bank statements, utility bills) should be retained and stored carefully. Source: CBG Law.
SDLT must be filed and paid to HMRC within 14 days of the effective date of the transaction — which is usually the completion date of the property purchase. If you miss this deadline, HMRC may charge penalties and interest. In almost all cases, your appointed solicitor or licensed conveyancer will file the SDLT return and arrange payment on your behalf as part of the conveyancing process.
SDLT is a lump sum payment — no instalments or payment plans are available. It cannot be paid by credit card. HMRC accepts payment by online banking, CHAPS, Bacs, or debit card.
For overseas buyers specifically, the 14-day deadline creates a practical challenge: if you are not yet certain whether you meet the 183-day UK residency test at the time of completion, your SDLT return must be prepared on the assumption that you are non-UK resident. You pay the surcharge at completion, and then reclaim it later if you subsequently meet the residency test. You cannot delay payment pending confirmation of your residency status. Source: HMRC internal manual SDLTM09880 / GOV.UK.
Your SDLT return is submitted to HMRC, not to HM Land Registry. However, the Land Registry will register the change of ownership only once SDLT has been paid — so delay in payment creates a delay in formal registration of your ownership.
This guide has been prepared by Castle & Knight for general information and educational purposes only. It does not constitute financial, tax, or legal advice. SDLT legislation is complex and individual liability depends on factors including but not limited to residency status, property type, ownership of other properties, transaction structure, and the date of completion. The information in this guide reflects the legislation and HMRC guidance as of April 2026. Tax law can and does change. All SDLT rates, thresholds, and examples cited in this guide are sourced from HMRC GOV.UK, Deloitte TaxScape, the Law Society, and other published authoritative sources. Castle & Knight strongly recommends that all buyers instruct an independent UK solicitor and qualified tax adviser before completing any property transaction. Castle & Knight is an introducer and does not provide tax, legal, or financial advice.