Stamp Duty Exemptions Summary
- First-time buyer relief: 0% on first £300,000 (properties up to £500,000)
- Zero-rate threshold: no SDLT on the first £125,000 (standard purchases)
- Divorce/dissolution: transfers under court order are fully exempt
- Death/inheritance: property passing on death is exempt from SDLT
- Sub-£40,000 purchases: no SDLT return required
- Charity relief: 0% rate for qualifying charitable purchases
- Crown and parliamentary bodies: fully exempt
First-Time Buyer Relief
First-time buyer relief is the most widely used SDLT exemption. Qualifying first-time buyers pay 0% on the first £300,000 of properties costing up to £500,000, and 5% on the portion between £300,001 and £500,000. If the property exceeds £500,000, the relief is lost entirely and standard rates apply.
To qualify, all purchasers must never have owned a freehold or leasehold (over 21 years) interest in a residential property anywhere in the world, and the property must be intended as their main residence.
Zero-Rate Threshold
All residential property purchases benefit from a nil-rate band of £125,000. No SDLT is payable on the first £125,000 of the purchase price. This means properties costing £125,000 or less are completely exempt from stamp duty.
For non-residential (commercial) property, the nil-rate threshold is £150,000. See our commercial stamp duty guide.
Transfers on Divorce or Dissolution
Property transfers between spouses or civil partners under a court order as part of divorce or dissolution proceedings are completely exempt from SDLT. This includes:
- Transfers of the matrimonial home to one spouse
- Transfers of buy-to-let or investment properties between spouses
- Transfers under a financial consent order
Transfers on Death (Inheritance)
Property passing on death — whether through a will, intestacy rules, or as a gift made in contemplation of death — is exempt from SDLT. No SDLT return is required.
However, if you subsequently sell the inherited property and buy a new one, SDLT applies to the new purchase at standard rates. The inherited property may also affect your additional property surcharge status on future purchases.
Purchases Under £40,000
Transactions where the total consideration (purchase price) is less than £40,000 are completely outside the SDLT regime. No SDLT is payable and no return needs to be filed. This applies to both residential and non-residential property.
Charity Relief
Registered charities purchasing property for qualifying charitable purposes benefit from a 0% SDLT rate on the entire purchase. The charity must be recognised by HMRC, and the property must be used for charitable purposes. If the property is later used for non-charitable purposes within 3 years, the relief may be clawed back.
Corporate Reliefs
Group Relief
Transfers of property between companies within the same group (75% common ownership) can claim group relief, reducing SDLT to zero. The relief may be clawed back if the group structure changes within 3 years.
Reconstruction and Acquisition Relief
Company reconstructions and acquisitions may qualify for relief, reducing SDLT on property transfers that form part of a corporate restructuring. Strict conditions apply regarding the nature of the scheme and the consideration involved.
Other Exemptions
- Crown bodies: government departments and the Crown are exempt
- Parliamentary bodies: exempt from SDLT
- Compulsory purchase: property acquired by compulsory purchase order may qualify for relief
- Right to Buy: council tenants exercising Right to Buy pay SDLT but may benefit from discounts that reduce the chargeable consideration
- Alternative finance (Sharia-compliant): specific relief ensures Islamic finance structures are not double-taxed
Related Guides
Frequently Asked Questions About Stamp Duty Exemptions
Key exemptions include: first-time buyer relief (0% up to £300,000), zero-rate threshold (£125,000), transfers on divorce under court order, property transferred on death, purchases under £40,000, and charity relief.
No. Property passing on death is exempt from SDLT. However, if the inherited property means you own two residential properties, the additional property surcharge may apply to your next purchase.
No. Property transfers under a court order during divorce or dissolution are fully exempt from SDLT, regardless of property value. Informal transfers between unmarried partners do not qualify.
Registered charities purchasing property for charitable purposes benefit from 0% SDLT relief. If the property is later used non-charitably within 3 years, the relief may be clawed back.
Yes. Residential properties £125,000 or less pay no SDLT. First-time buyers pay nothing on properties up to £300,000. Purchases under £40,000 do not even require an SDLT return. Non-residential property has a £150,000 nil-rate threshold.