How to Avoid Stamp Duty on Property (Legally)

Stamp Duty Land Tax (SDLT) is one of the most significant costs when buying property in England or Northern Ireland - but did you know there are legitimate ways to reduce or even avoid paying it?

While you can’t simply “opt out” of stamp duty, there are several legal exemptions, reliefs and strategies that could lower your bill - or eliminate it altogether in certain cases.

Here’s what you need to know.

1. Buy Below the Stamp Duty Threshold

If you're a first-time buyer, you may not pay any SDLT at all, depending on the purchase price.

First-Time Buyer Relief (2025 rates):

No SDLT on the first £300,000 of a property
5% SDLT on the portion between £300,001 and £500,000
No relief for purchases over £500,000

If you’re not a first-time buyer:

There’s no SDLT on residential property up to £125,000
(Or up to £150,000 for non-residential and mixed-use)

2. Purchase a Non-Residential or Mixed-Use Property

SDLT rates for non-residential and mixed-use properties are lower than residential rates, and not subject to the 3% second home surcharge.

What counts as mixed-use?

A flat above a commercial unit
A home with agricultural land or outbuildings
Live/work spaces
Properties with trading elements (e.g. B&Bs, small farms)

If your purchase qualifies, it could significantly reduce your SDLT, and in some cases, eliminate it altogether for lower-value transactions.

3. Transfer Property Between Spouses or Civil Partners

Transfers of property between spouses or civil partners are exempt from SDLT in most cases, even if there’s an outstanding mortgage.

This can be especially useful in scenarios involving inheritance planning, divorce settlements, or portfolio restructuring.

4. Buy Through a Company (Carefully)

Purchasing property through a limited company doesn’t automatically remove SDLT, and often comes with a 15% higher rate if the property is over £500,000 and deemed residential.

However, it can be tax-efficient in some cases, particularly for:

Commercial properties
Buy-to-let portfolios
Development sites

It’s essential to seek advice first, as getting this wrong can be costly. We can offer pre-transaction advice to help ensure you’re paying the correct amount of stamp duty from the outset.

5. Use Legitimate Reliefs and Exemptions

There are other SDLT reliefs that may apply, including:

Group relief (for companies within the same corporate group)
Charity relief (if buying for charitable purposes)
Right to Buy transactions
Certain compulsory purchase orders (CPOs)

If your purchase qualifies under one of these categories, you may be able to reduce or avoid SDLT entirely.

6. Reclaim Overpaid Stamp Duty After the Sale

Even if you’ve already paid stamp duty, it’s not too late to take action. Many buyers overpay SDLT due to errors or misclassification, and never find out unless they get a review.

At SCA Tax, we regularly help clients reclaim stamp duty for: