Stamp Duty Exemptions and Reliefs

Here's the real difference between paying nothing because you're exempt, and paying nothing because a relief brought your bill down to zero.

Exemption vs relief: what's the difference?

These two words get used interchangeably, but they mean different things to HMRC. An exemption means the transaction isn't notifiable at all: you don't file an SDLT1 return, because HMRC doesn't need to know about it. A relief means the transaction is still notifiable: you must file a return, but you claim the relief on that return to reduce or wipe out the tax you'd otherwise owe¹.

This distinction trips people up most often around the 0% tax band. Buying a home for £100,000 means you owe no SDLT, because it falls entirely within the current standard nil-rate band of £0 to £125,000 (or £0 to £300,000 for first-time buyers)⁴. But you generally still have to file a return, because only transactions under £40,000 are exempt from notification altogether³. Paying nothing and not needing to tell HMRC anything are two different things.

Automatic exemptions (no return needed)

• Transactions under £40,000: If the total chargeable consideration is below £40,000, the purchase isn't notifiable at all, no return, no tax³
• Genuine gifts: If a property is given to you with no money changing hands and no mortgage debt taken on, there's nothing to tax
• Inherited property: No SDLT applies when you inherit a property via a will or intestacy
• Divorce or dissolution transfers: Transferring property between spouses or civil partners as part of a court order, or a written separation agreement, connected to the separation is exempt
• Crown exemption: Crown bodies don't pay SDLT
• Charities: Registered charities buying property for charitable purposes pay 0%, provided the purchase meets the qualifying conditions

Reliefs that need a return, explained

These all require an SDLT1 return, with the relief claimed on it.

First-time buyer relief

First-time buyers pay 0% on the first £300,000 of a purchase, with relief tapering out entirely above £500,000. See our first-time buyer relief guide for the full rules on who qualifies and how the relief is calculated.

Right to Buy

Council and housing association tenants exercising their Right to Buy pay 0% SDLT on the discounted purchase price, provided the standard Right to Buy conditions are met.

Shared ownership staircasing

If you own a share of a property under a shared ownership scheme and buy further shares (staircasing), you can elect to pay SDLT upfront on the full market value at the outset, which then covers later staircasing purchases without further tax, or pay as you go on each additional share. Which option works out cheaper depends on how much of the property you expect to eventually own.

Multiple dwellings relief (abolished 1 June 2024)

Multiple dwellings relief (MDR) used to let you claim a lower effective rate when buying 2 or more dwellings in one transaction, common with buy-to-let investors or anyone buying a property with an annexe. It was abolished for transactions completing on or after 1 June 2024, with a narrow exception for buyers who'd already exchanged contracts on or before 6 March 2024². If you're buying multiple dwellings in one transaction now, you pay standard rates (plus the second-home surcharge, where it applies) on the full price, with no averaging available.

It's still worth understanding how MDR worked, because you'll see it referenced in older articles and by anyone who used it before the cutoff. Say a buyer purchased two flats in a single transaction for £300,000 each, £600,000 total, back when MDR was still available and the standard 0% band ran to £250,000. Under MDR, SDLT was calculated on the average price per dwelling, not the total:

• Average price per dwelling: £600,000 ÷ 2 = £300,000
• SDLT on £300,000 at the rates then in force: 0% on £250,000 + 5% on £50,000 = £2,500
• Multiplied by 2 dwellings: £5,000
• But MDR came with a floor: the relief could never take the bill below 1% of the total price paid. 1% of £600,000 is £6,000, which is higher than the £5,000 calculated above, so the minimum applied and the buyer paid £6,000
• Compare that with paying standard rates on the full £600,000 with no relief at all: 0% on £250,000 + 5% on £350,000 = £17,500

So MDR saved this buyer £11,500 when it was available. Today, the same purchase would simply be charged at standard rates (or the surcharge rate, for an investor) on the full £600,000, with no averaging and no minimum-rate calculation to worry about.

Worked example: divorce and separation relief

Sarah and Michael divorce. Their family home is worth £500,000 and they own it jointly, so each holds a £250,000 share. As part of the court-approved consent order, Michael transfers his half to Sarah, who keeps the house and takes over the mortgage in her sole name.

Normally, transferring a £250,000 interest in a property would trigger SDLT, calculated on whatever consideration is given, which can include taking on someone else's share of outstanding mortgage debt. Because this transfer happens under a court order connected to the divorce, it's exempt entirely: Sarah pays no SDLT on taking over Michael's share, whatever the mortgage figure involved. The same exemption applies to separating civil partners, and to transfers made under a written separation agreement rather than a formal court order, provided the transfer is genuinely connected to the separation.

What HMRC wants to see for each relief

Your solicitor submits this as part of, or in support of, the SDLT return. Keep the underlying documents with your property paperwork; HMRC can ask for them later even after a relief has already been accepted.

• Right to Buy: confirmation from the local authority or housing association that the sale is under the statutory Right to Buy scheme
• Charities relief: evidence of registered charitable status and a statement of how the property will be used for the charity's purposes
• Divorce and separation: a copy of the court order, consent order, or written separation agreement showing the transfer is connected to the separation
• Shared ownership staircasing: the original lease and staircasing deed showing the share bought and the election made at first purchase
• Inherited property: the grant of probate or letters of administration, alongside the will, or evidence of the intestacy rules applied if there's no will

What isn't exempt

Common scenarios that people assume qualify for an exemption or relief, but don't:

• Gifted property with a mortgage attached: if you take on someone else's outstanding mortgage debt as part of a "gift," that debt counts as chargeable consideration, and SDLT is due on it
• Purchases by limited companies: companies buying a single dwelling for more than £500,000 usually pay a flat 17% rate, unless a specific relief (such as a genuine property rental business) applies
• Non-residential conversions: if you buy a commercial property intending to convert it to residential use, standard non-residential rates apply until the conversion is actually complete, not before
• "No consideration" claims that don't hold up: calling a payment a loan, a deposit, or a family arrangement doesn't remove it from SDLT if HMRC decides it was really the price paid for the property; the exemption only applies where genuinely nothing of value changes hands

If none of these apply and you're not sure which band you fall into, our stamp duty rates guide covers the current thresholds for movers, first-time buyers and additional-property buyers in full, and our second homes guide covers the surcharge in detail. For anything involving a company, a trust, or a transaction you're not confident fits neatly into one category, get a solicitor to check before you rely on an exemption, since HMRC can and does open enquiries into claimed reliefs after completion.

£40,000

Purchase price below which no SDLT return is needed at all

£300,000

First-time buyer 0% relief threshold

1 June 2024

Date multiple dwellings relief was abolished

17%

Flat rate for companies buying a dwelling over £500,000

Last reviewed: 2026-07-31. Rates verified against gov.uk.