Published: June 2026 | Fact-Checked & Audited By: David Vance, CTA FCA (Chartered Tax Advisor & Accountant)
This guide is fully updated for the 2026/27 HMRC tax year. All calculations and tax rules have been audited against official UK legislation.
Stamp Duty Land Tax (SDLT) is one of the most expensive transaction costs when buying property in the UK. However, many buyers are unaware of the various legal exemptions, reliefs, and deductions that can significantly reduce their tax bill. For the 2026/27 tax year, staying updated on these rules is critical—especially following the abolition of Multiple Dwellings Relief (MDR). In this guide, we explore the legitimate ways to reduce your Stamp Duty liability legally.
A Key Update: The Abolition of Multiple Dwellings Relief (MDR)
In previous years, investors buying multiple flats or a house with an annex could claim Multiple Dwellings Relief (MDR) to average the property values and reduce their tax rate. However, the government **abolished MDR from 1 June 2024**. For transactions in the 2026/27 tax year, MDR is no longer available. You must look to other remaining reliefs and exemptions to manage your tax exposure.
Top Legal Stamp Duty Reliefs & Exemptions (2026/27)
The table below outlines the most common residential SDLT reliefs, eligibility requirements, and the tax savings they offer:
| Relief / Exemption | Eligibility Requirement | Tax Impact |
|---|---|---|
| First-Time Buyer Relief | Never owned property; purchase price up to £500k | 0% up to £300k; 5% on portion to £500k |
| Transfer of Equity (Divorce) | Transferring property deeds due to divorce or separation | 100% Tax-Free (Exempt) |
| Inheritance & Wills | Acquiring a property left to you in a deceased person’s will | 100% Tax-Free (Exempt) |
| Gifts (No Consideration) | Gifting a property with no mortgage transfer or cash payment | 100% Tax-Free (Exempt) |
| Commercial / Non-Residential | Property is mixed-use or commercial (no residential dwelling) | Standard commercial rates (up to 5%); exempt from surcharge |
Deducting Chattels (Fixtures and Fittings)
You only pay Stamp Duty on the value of the land and buildings. You do not pay SDLT on removable items (chattels) included in the sale, such as free-standing furniture, carpets, white goods, or curtains. If you agree to buy these items from the seller, you can deduct their reasonable market value from the total purchase price submitted to HMRC. For example, if a house is purchased for £255,000, and you pay £6,000 for high-quality furniture, the taxable property price becomes £249,000, keeping you below the 5% tax bracket and saving you tax.
To run your own calculations and see how deductions or reliefs affect your tax liability, use our Stamp Duty Calculator.
What People Search For: FAQs on Reducing Stamp Duty Legally
1. What are the main legal exemptions for Stamp Duty Land Tax (SDLT)?
Exemptions include properties transferred under a divorce settlement or separation agreement, properties left in a will, properties gifted with no outstanding mortgage or consideration, and transactions where the value is under £40,000.
2. How can I deduct fixtures, fittings, and chattels to lower stamp duty?
You can deduct the fair market value of movable items (like furniture, free-standing appliances, and carpets) from the property purchase price. Since SDLT is only paid on land and buildings, reducing the purchase price by the value of the chattels can reduce your tax band.
3. Is there a replacement for Multiple Dwellings Relief (MDR) since its abolition?
There is no direct replacement for Multiple Dwellings Relief. However, if you purchase six or more residential units in a single transaction, you can still elect to pay non-residential (commercial) stamp duty rates, which are capped at 5% and exempt from the 5% surcharge.
4. Do you pay stamp duty on a property transfer during divorce or separation?
No. Transfers of interest in a property between separating or divorcing spouses or civil partners are exempt from Stamp Duty, provided they are made in connection with the dissolution of the marriage or partnership.
5. Is stamp duty payable on gifted property with no outstanding mortgage?
If you gift a property to someone and there is no outstanding mortgage and no cash changes hands (no consideration), the transfer is completely exempt from Stamp Duty Land Tax.
6. How does the 6-property rule allow residential buyers to pay lower commercial rates?
Under HMRC rules, if you buy six or more residential properties in a single transaction, the transaction is treated as non-residential. This means you pay commercial rates (maximum 5%) instead of residential rates and do not face the 5% second home surcharge.
7. Can I claim a refund or pay less stamp duty if a property is uninhabitable?
Yes. If a property is structurally unsafe, severely damaged, or lacks basic facilities (like a kitchen or bathroom) at completion, it can be classified as non-residential. Non-residential properties benefit from lower tax bands and are exempt from the 5% surcharge.
8. Do you have to pay stamp duty when inheriting a property under a will?
No. Properties inherited under a will or passing through probate are completely exempt from Stamp Duty Land Tax. No SDLT return needs to be filed for a simple inheritance.
9. Can a property purchased via a trust qualify for stamp duty relief?
It depends on the type of trust. If a beneficiary has an immediate right to occupy the property (such as under an Interest in Possession trust), HMRC treats the beneficiary as the owner. If they are a first-time buyer, they can claim relief. For discretionary trusts, first-time buyer relief is not available, and they may be subject to the 5% surcharge.
10. Can I claim a refund on stamp duty if I pay off the outstanding mortgage on a gifted property?
If you are gifted a property and take over a mortgage, you pay Stamp Duty based on the outstanding mortgage balance (consideration). Paying off the mortgage *after* the completion day does not entitle you to a refund, as SDLT is determined based on the conditions on completion day.