Stamp Duty on Remortgage: When and How Much

The General Rule: Remortgage Alone Pays No SDLT

SDLT is charged on the "consideration" paid to transfer an interest in land. When you remortgage your own property without changing who owns it, there is no transfer, no consideration, and no SDLT. This applies whether you are moving from Halifax to Nationwide, fixing for a longer term, or releasing equity for home improvements. HMRC's Stamp Duty Manual confirms: refinancing existing ownership does not itself create an SDLT liability.

The confusion arises because many remortgages coincide with life events that do create an SDLT event. Getting married and adding your spouse to the title, divorcing and buying out your ex, adding your adult child as joint owner for inheritance planning, or incorporating a buy-to-let portfolio into a limited company all involve a transfer of land interest, and therefore potentially SDLT.

Scenario	SDLT?	Notes
Remortgage in same sole name	No	No transfer of interest
Remortgage in same joint names	No	Same owners, same shares
Add spouse to title during refinance	Possibly	Only if consideration paid (assumption of mortgage debt counts)
Remove ex-partner during refinance	Possibly	Buy-out payments count as consideration
Transfer BTL to limited company	Yes	Full SDLT at second-home rates

The 2026 SDLT Rate Table (Residential, England and NI)

From the April 2025 changes, residential SDLT rates in England and Northern Ireland are tiered as follows. First £125,000: 0% (up from £250,000 before 1 April 2025). £125,001 to £250,000: 2%. £250,001 to £925,000: 5%. £925,001 to £1.5m: 10%. Over £1.5m: 12%. First-time buyers get relief up to £300,000 (0%) with tapered rates to £500,000, but remortgagors are almost never first-time buyers.

An additional 5% surcharge applies to second homes and buy-to-let (up from 3% since October 2024), stacked on top of the standard rates. So a buy-to-let at £300,000 pays 5% on first £125,000 (£6,250) + 7% on £125k-£250k (£8,750) + 10% on £250k-£300k (£5,000) = £20,000 total.

In Scotland, LBTT follows similar bands with a Additional Dwelling Supplement of 8% (raised from 6% in December 2024). In Wales, LTT surcharge sits at 5% over standard bands. Always check the jurisdiction of the property, not your residency.

Worked Example 1: Adding a Spouse to the Title

Sophie has owned her flat since 2018. It is worth £320,000 with a £180,000 mortgage balance. She is remortgaging and adding her husband Tom to the title (joint tenants, 50/50). Tom does not pay Sophie any cash, but by taking on joint responsibility for the mortgage he is providing consideration of 50% of the mortgage balance = £90,000.

SDLT on £90,000 consideration: the whole amount sits within the 0% band (£0 to £125,000), so SDLT due is £0. No second-home surcharge because this is Sophie and Tom's main home. A form SDLT1 must still be filed with HMRC within 14 days of completion even though the tax is £0.

Compare with a £420,000 property and £320,000 mortgage: 50% of £320,000 = £160,000 consideration. SDLT is 0% on first £125,000 and 2% on the next £35,000 = £700. Still modest, but now non-zero. If either Sophie or Tom owns another property, the 5% surcharge stacks and the SDLT becomes substantial.

Worked Example 2: Divorce Buy-Out

Alex and Chris divorced in 2025. Their jointly-owned home is worth £450,000 with a £220,000 mortgage. Alex is keeping the house; the court order directs that Chris's equity share (£115,000 — half of the £230,000 net equity) is paid by Alex to Chris, and Alex assumes the full mortgage.

Consideration for SDLT: Alex is paying Chris £115,000 cash plus taking over Chris's half of the mortgage (£110,000), total £225,000. SDLT: 0% on first £125,000 + 2% on £125k-£225k = £2,000. However, SDLT relief applies under Schedule 4ZA FA 2003 and Paragraph 3 Schedule 3 FA 2003 for transfers pursuant to a court order or formal separation agreement. Alex pays £0 SDLT if the court order is properly drafted.

This relief must be claimed on the SDLT1 return. If the buy-out is informal (no court order, no separation agreement), the relief is not available and the full £2,000 is due. It is routinely worth paying a family solicitor to formalise the arrangement; the legal fee is far less than the potential SDLT.

Worked Example 3: Gifting Equity to Adult Child

James owns a £580,000 flat outright. He wants to add his 30-year-old daughter Emma as joint tenant for inheritance planning, taking out a joint mortgage for £150,000 to release equity for his retirement.

Two things happen at once. First, James gifts a 50% share to Emma, worth £290,000. A pure gift with no consideration does not attract SDLT. Second, Emma takes on joint liability for the new £150,000 mortgage: her share of the debt is £75,000, which is treated as consideration for her acquisition of the half share.

SDLT on £75,000 consideration: 0% band, so £0 standard rate. But: does Emma own another residential property? If yes (even a small BTL), the 5% second-home surcharge applies to the whole £75,000, giving £3,750 SDLT. Parents planning this kind of transfer should check their adult child's property status before proceeding, because a student flat owned by Emma for a few thousand pounds equity can cause thousands in surcharge SDLT.

Worked Example 4: BTL Incorporation

Mohammed owns three BTL properties in his personal name, totalling £1.2m. He wants to transfer them into a limited company for Section 24 mortgage interest relief reasons. Each transfer is a sale from Mohammed to Mohammed's limited company, even though beneficial ownership stays with him.

SDLT on £1.2m of residential property via company acquisition: the company pays standard SDLT plus 5% surcharge plus 15% enveloped dwellings supplement if any single property is worth over £500,000 and held for non-qualifying purposes. On a portfolio, multiple dwellings relief (MDR) can reduce the average-per-property calculation, and Section 162 incorporation relief can defer capital gains — but SDLT is generally not relieved.

Rough SDLT estimate: on three properties totalling £1.2m with MDR (average £400,000 each), standard SDLT per property is £7,500, surcharge 5% is £20,000 per property, total per property £27,500 times three = £82,500, minus MDR adjustments = around £75,000. Specialist tax advice is essential; incorporation is rarely worthwhile below £150,000 annual rental income, and the SDLT bill often dominates the decision.

How to Claim Reliefs

SDLT reliefs are not automatic. The SDLT1 form must be filed within 14 days of completion, claiming the specific relief box. Your conveyancer usually files this; confirm which relief is being claimed and review the form before submission. Common reliefs on remortgage-adjacent transactions include: divorce or separation (Schedule 3 FA 2003), gifts between spouses or civil partners (Schedule 3 FA 2003 para 3A), multiple dwellings relief (Schedule 6B FA 2003), and incorporation relief for LLP-to-company partnerships.

HMRC can amend a return for up to 9 months after filing if the return was wrong, and can enquire for up to 4 years if tax was underpaid (6 years for negligence, 20 years for deliberate evasion). Keeping full records of the transaction and any legal correspondence protects you against a later enquiry.

If you discover you overpaid, an SDLT refund claim can be made for up to 4 years after completion. Specialist firms charging contingent fees for "SDLT refund reviews" have been the subject of FCA and HMRC warnings for aggressive or spurious claims; only use a regulated tax adviser or solicitor.

Practical Calculator Workflow

Before committing to a remortgage that involves any ownership change, work through this sequence. Step one: identify whether there is a transfer of interest (new person added or existing person removed from the legal title). If yes, SDLT is in scope. Step two: calculate the consideration — cash paid plus share of mortgage debt assumed. Step three: apply the relevant SDLT bands, adding surcharges if a second home or buy-to-let is involved.

Step four: check for available reliefs. Divorce, spousal transfer, multiple dwellings, and incorporation reliefs are the big four. Step five: factor the SDLT into the total cost of remortgage. A £3,000 SDLT liability is the same size as a typical product fee and materially changes the net saving analysis. If your conveyancer's quote does not line-item SDLT separately, ask for the breakdown in writing; surprises on the completion statement are a common grievance and are avoidable with early clarification.

HMRC's official SDLT calculator at gov.uk handles the arithmetic accurately but does not flag reliefs. Your conveyancer should confirm the figure before completion. The FCA Consumer Duty requires mortgage advisers to consider tax costs in their suitability assessment, so regulated brokers should flag SDLT early in the conversation. If the broker has not mentioned SDLT on a transfer-of-equity remortgage, raise it before accepting the advice.

Keep a folder of documents for any SDLT-adjacent transaction: the original purchase SDLT return, any subsequent transfers, the court order or separation agreement (for divorce reliefs), company incorporation paperwork (for BTL moves), and the new SDLT1 from the current transaction. HMRC can re-open assessments for up to four years normally and six years for negligence, so retention matters. If you receive any unexpected HMRC correspondence, send it straight to your conveyancer or a specialist tax adviser; do not respond ad hoc.