SDLT looks simple on paper — pick the right rate band, multiply, done. In practice, the rules around who counts as a first-time buyer, what counts as a residential interest, and when the additional-property surcharge applies catch buyers out repeatedly. Here are the most common mistakes we see, and the rules you actually need to know.

1. Forgetting about an inherited share

"I've never bought a property, so I'm a first-time buyer." A common assumption — and wrong if you've inherited any share of a residential property. A 25% share in your late parent's house counts as a residential interest for SDLT, even if you've never lived there and have no plans to. Ownership of a share worth more than £40,000 alone is enough to make your next purchase an "additional property" and attract the 5% surcharge.

What to do: if you have any inherited interest in property, declare it. Check whether the share is worth more than £40,000. If it is, you'll pay higher rates on the new purchase. If you sell or transfer the inherited share before completion, the higher rates may not apply — but get specialist tax advice on the timing.

2. Joint buyers with mismatched status

You've never owned property; your partner has. You're buying together. You assume you'll get first-time buyer relief on at least your half. You won't.

The SDLT rules treat joint buyers as a single unit. If any named buyer has ever owned a residential property anywhere in the world, the relief is lost for everyone on the purchase. Same logic for the additional-property surcharge: if any joint buyer already owns another residential property and the new purchase isn't replacing their main home, the higher rates apply to the whole transaction.

What to do: if only one of you currently owns property and you can sell it, complete the sale on or before the day you complete the purchase. That avoids the surcharge. If buying with a partner whose ownership history disqualifies first-time buyer relief, factor the lost saving into your offer.

3. Overseas property you forgot about

A holiday flat in Spain, a share of a family home in India, a half interest in a property in Australia — they all count for SDLT. The rules look at residential interests held anywhere in the world, not just in the UK. Buyers regularly forget to mention overseas property to their conveyancer because they don't think it's relevant. It is.

What to do: tell your solicitor about every property you own or part-own, anywhere in the world. They can then advise on whether the additional-property rates apply.

4. Buying a new home before selling the old one

You've found your new home but your old one hasn't sold yet. You assume you'll pay standard rates because you're "obviously" replacing your main residence. You won't — at least not at the time of completion.

At the moment of completion you own two homes, so the higher rates kick in. The good news is you can reclaim the surcharge from HMRC once you sell the old home, provided the sale happens within three years. But the cash-flow hit at completion is real — your solicitor will need the full higher-rate SDLT on the day, even though you'll get most of it back later.

What to do: budget for the upfront surcharge as part of your completion funds. Plan to apply for the refund as soon as the old home sells.

5. Misreading the £500,000 first-time buyer cap

First-time buyer relief disappears entirely above £500,000 — it doesn't taper. A £499,000 FTB purchase pays £9,950 in stamp duty. A £501,000 purchase pays £15,050. A £2,000 increase in price costs you more than £5,000 in extra tax because the relief is lost.

What to do: if you're negotiating around the cap, push hard for a price below £500,000. The seller is likely better off too — they're not paying tax on the difference.

6. Divorce and separation transfers

A property transferred between spouses or civil partners as part of a divorce or separation settlement is generally exempt from SDLT, provided the transfer is made under a court order, statutory authority, or a formal separation agreement. Informal transfers between separating couples don't qualify and can trigger an SDLT charge based on the value of any mortgage that's taken over.

What to do: get the divorce or separation properly documented. Court-approved settlements get the exemption; informal arrangements often don't.

7. Mixed-use claims that don't hold up

A property that's part residential and part commercial — say a shop with a flat above — is taxed at non-residential SDLT rates, which top out at 5% rather than 12%. The saving on a £1m+ property can be very large, so mixed-use claims are aggressively marketed by tax advisers and equally aggressively challenged by HMRC.

What HMRC won't accept: a house with a paddock you let to a neighbour, a house with an annexe used as a granny flat, a house with home office space. The non-residential element has to be genuine, substantial, and commercially exploited.

What to do: if the saving is meaningful, get specialist tax advice before you claim mixed-use rates. Successful claims usually have things like documented commercial leases, business rates being paid, or genuinely separate commercial use of part of the property.

8. Connected-party transfers at undervalue

Selling your house to a family member at a discount doesn't escape SDLT. The buyer (your relative) pays SDLT on the market value of the property, not the price you actually charged. HMRC has connected-persons rules precisely to stop this kind of arrangement avoiding tax.

What to do: if you're selling to a relative below market value, get a written valuation. The SDLT will be based on that, not the discounted price.

9. Forgetting the 14-day filing deadline

The SDLT return must be filed and the tax paid within 14 days of the effective date of the transaction (usually completion). Late filing attracts an automatic £100 penalty, increasing the longer the delay runs. Late payment attracts interest. In nearly all residential transactions your solicitor handles this — but in DIY conveyancing or complex transactions, the deadline can be missed.

What to do: confirm with your solicitor that the SDLT return has been filed and the tax paid. If you're DIY-conveyancing, diary the deadline.

10. Assuming the rules are the same in Scotland and Wales

They're not. SDLT applies in England and Northern Ireland only. Scotland uses Land and Buildings Transaction Tax (LBTT) with different thresholds. Wales uses Land Transaction Tax (LTT) with different thresholds again. Buying in Scotland or Wales? Use the calculator appropriate to that nation, not this one.

Last updated: 1 May 2026.