“Property tax” in the UK is not a single tax. It is a collection of different taxes and charges that apply at different stages of owning, buying, and selling property — each with its own rules, rates, and exemptions. Understanding which taxes apply to you, and when, is one of the most practically important aspects of any property transaction in the UK.
This guide covers every major property tax in the UK in 2026 — what it is, when it applies, who pays it, and the current rates. It is not a substitute for professional tax advice on your specific situation, but it gives you the clarity to ask the right questions before you commit to any transaction.
Stamp Duty Land Tax (SDLT) — England and Northern Ireland
Stamp Duty Land Tax is the most immediately significant property tax for most buyers. It applies to residential and commercial property purchases in England and Northern Ireland, is paid by the buyer, and must be submitted and paid within 14 days of completion.
SDLT is calculated on a sliding scale — each rate applies only to the portion of the purchase price that falls within that band, not the whole price.
Current standard rates (from 1 April 2025):
- 0% on the first £125,000
- 2% on £125,001 to £250,000
- 5% on £250,001 to £925,000
- 10% on £925,001 to £1,500,000
- 12% above £1,500,000
For example, a £500,000 residential property incurs no duty on the first £125,000, 2% on the next £125,000, and 5% on the remaining £250,000 — a total of approximately £14,999.
First-time buyer relief: First-time buyers pay no stamp duty on properties up to £300,000 and a discounted rate on purchases up to £500,000. This relief was reduced from the previous £425,000 threshold when the temporary relief expired in April 2025.
Additional dwelling surcharge: The additional dwelling surcharge rose to 5% in the Autumn Budget 2024. This applies to second homes, buy-to-let purchases, and any residential property purchase where the buyer already owns another. The surcharge stacks on top of the standard rates.
Non-resident surcharge: Overseas buyers face an additional 2% surcharge on top of all applicable stamp duty rates.
Scotland and Wales have their own equivalents — Land and Buildings Transaction Tax (LBTT) in Scotland and Land Transaction Tax (LTT) in Wales, with different rates and thresholds.
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The Mansion Tax (High Value Council Tax Surcharge) — From 2028
A new property tax is coming. The High Value Council Tax Surcharge will apply to homeowners with properties valued at more than £2 million in England, with annual charges of £2,500 to £7,500 depending on property value. It will be collected alongside council tax from April 2028 — and it is homeowners, not occupiers, who must pay it.
This is a significant shift for the premium property market. It applies to homeowners regardless of whether they live in the property. The precise value bands and rates are still subject to consultation but the legislation has been confirmed
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Council Tax — Annual Charge on Occupiers
Council tax is the ongoing annual property tax paid by whoever occupies a residential property — owner-occupiers, tenants, or (in some circumstances) the owner if the property is empty.
It is charged by the local authority at a rate based on the council tax band of the property. Bands run from A (lowest) to H (highest) and were set by reference to 1991 property values. The actual rate varies by local authority.
Key facts:
- Single occupants receive a 25% council tax discount
- Students in full-time education are exempt
- Empty properties may still be charged council tax — some councils charge a premium on long-term empties
- A separate High Value Council Tax Surcharge on properties over £2 million will apply from April 2028.
Council tax is typically between £1,500 and £3,500 per year for a Band D property depending on borough. London boroughs vary significantly — Wandsworth has historically charged among the lowest rates, while other boroughs charge considerably more.
Capital Gains Tax on Property
Capital gains tax (CGT) applies when you sell a property that is not your main home and you make a profit. The most common scenarios are selling a buy-to-let property or a second home.
CGT on property typically applies when selling a buy-to-let or second home. Your main residence is typically exempt through Private Residence Relief.
Current CGT rates on residential property (as of 2026):
- Basic rate taxpayers: 18%
- Higher and additional rate taxpayers: 24%
CGT is calculated on the gain — the difference between what you paid (plus buying costs and improvement costs) and what you sell for (minus selling costs). Annual CGT exemption applies but has been significantly reduced in recent years.
Property Income Tax (Landlords)
If you receive rental income from a property you own, that income is taxed as part of your overall income tax liability at your marginal rate. Landlords can deduct allowable expenses — letting agent fees, maintenance costs, insurance, and some mortgage interest — before calculating taxable profit.
Property income tax rates are increasing from April 2027, with rates rising by 2% across basic, higher, and additional rates, taking these to 22%, 42%, and 47% respectively. This change, announced in the November 2025 Budget, increases the landlord tax burden further from 2027.
For official stamp duty guidance and rates, check: GOV.UK — Stamp Duty Land Tax
Inheritance Tax on Property
Inherited property forms part of the deceased’s estate for inheritance tax purposes. The standard nil-rate band is £325,000 per individual, and the residence nil-rate band (RNRB) of £175,000 applies where a main residence is passed to direct descendants.
Above these thresholds, inheritance tax is charged at 40% on the excess. For property owners in London and the South East — where properties can easily exceed these thresholds — IHT planning is a significant consideration.
For council tax bands and rates by local authority, check: GOV.UK — council tax bands and rates
Conclusion
Property tax in the UK covers stamp duty at purchase, council tax on occupation, capital gains tax on disposal of non-primary residences, and income tax on rental profits. From April 2028, a High Value Council Tax Surcharge adds a further annual charge for properties over £2 million. Understanding which taxes apply at each stage of ownership — buying, holding, renting, and selling — is the foundation of sound property financial planning.
Frequently Asked Questions
Is council tax a property tax in the UK?
Yes — council tax is a local government tax levied on domestic properties and paid by the occupier. It is based on the council tax band of the property (set by reference to 1991 values) and the rate set by the local authority. It is distinct from stamp duty, which is paid at purchase, and from capital gains tax, which applies on disposal.
How much is stamp duty in 2026?
Standard SDLT rates from April 2025 are 0% up to £125,000, 2% on £125,001 to £250,000, 5% on £250,001 to £925,000, 10% on £925,001 to £1.5 million, and 12% above £1.5 million. First-time buyers pay 0% up to £300,000. These rates apply in England and Northern Ireland; Scotland and Wales have different property transfer taxes.
Do you pay tax on property you already own in the UK?
Yes — council tax is an annual charge paid by occupiers based on the property’s council tax band and local authority rate. From April 2028, homeowners with properties valued above £2 million in England will also pay the High Value Council Tax Surcharge of £2,500 to £7,500 per year depending on value.
