Stamp Duty Land Tax (SDLT) is a core topic in CeMAP Module 2. If you’re preparing for your exams, you must know how to calculate SDLT accurately. This guide gives you a clear overview of the bands, a simple formula and a worked example. By the end, you’ll have a reference you can use in both study and exam scenarios.
Tutor Tip:
Always check that you’re using the correct SDLT rates for the exam’s effective date.
What Is Stamp Duty Land Tax (SDLT)?
Stamp Duty Land Tax is a tax on property transactions in the UK. When you buy a residential property above a certain value, SDLT applies in bands. CeMAP exams often test your ability to break a purchase price into these bands and calculate the tax for each.
- Transaction value: The full price paid for the property.
- Residential vs non-residential: Rates differ if the property is commercial.
SDLT Bands Explained
Band Threshold (£) | Rate (%) |
0 – 125,000 | 0 |
125,001 – 250,000 | 2 |
250,001 – 925,000 | 5 |
925,001 – 1,500,000 | 10 |
Above 1,500,000 | 12 |
Tutor Tip:
First-time buyers may qualify for relief on the 0% and 2% bands up to £500,000. Always confirm reliefs before exam calculations.
The Stamp Duty Formula
To calculate SDLT, apply each band in turn using a cumulative approach:
- Identify the portion of the purchase price within each band.
- Multiply that portion by the band’s rate.
- Sum the results.
- Use percentage in decimal form (e.g. 2% = 0.02).
- Always round the final SDLT figure to the nearest pound as per exam conventions.
Step-by-Step Worked Example
Scenario: A buyer purchases a home for £350,000.
- 0% band on first £125,000:
£125,000 × 0 = £0 - 2% band on next £125,000 (125,001–250,000):
£125,000 × 0.02 = £2,500 - 5% band on remaining £100,000 (250,001–350,000):
£100,000 × 0.05 = £5,000
Total SDLT payable = £0 + £2,500 + £5,000 = £7,500
Tutor Tip:
In exams, show each step clearly and label your band calculations.
Common CeMAP Exam Questions & Pitfalls
- Question style: “Calculate the SDLT on a property purchase of £350,000.”
- Frequent errors:
- Ignoring the 0% band
- Applying one rate to the full price
- Failing to round correctly
Practice several variations to build speed and accuracy.
Quick Reference Cheat Sheet
- Bands and rates: Memorise the table thresholds and percentages.
- Formula: SDLT = sum of (portion × rate).
- Rounding: Final total to nearest whole pound.
Frequently Asked Questions
What if the property price sits exactly on a band threshold?
Include the full threshold amount in the lower band, and start the next band from the next pound.
Do SDLT rates differ for buy-to-let or second homes?
Yes. Additional 3% on each band applies for second properties. Always check the current rules.
Conclusion & Next Steps
Ready for more exam-style examples?
Book our CeMAP Home Study course or visit our website for full training resources:
https://cemap123.co.uk/home-study-training/