For most people, no — you don’t pay stamp duty when you extend your lease. SDLT is only charged on the premium you pay for the extension, and only if that premium tops the residential nil-rate band of £125,000 (the level since April 2025). Most flat extensions cost well under that, so the bill is zero. The higher-rate surcharge for additional properties usually doesn’t apply either, because you already own the property. Below I’ll show exactly when it does and doesn’t bite, with worked examples.
This question comes up constantly from leaseholders, and there’s a lot of unnecessary worry around it. The good news is that for the great majority of people extending a flat lease, stamp duty simply doesn’t enter into it. But there are a couple of situations where it does, so let’s separate the rule from the exceptions.
How much SDLT applies · The conveyancing side · If it’s your home · Higher-rate rules · Worked examples · FAQs
How much Stamp Duty do I need to pay?
When you extend a lease, HMRC treats it as the acquisition of a new lease, and SDLT can in principle be charged on the premium — the lump sum you pay for the extension. The key word is can. SDLT on a residential premium only starts once the premium exceeds the nil-rate band of £125,000. Pay less than that, and the stamp duty is zero. The table below shows how the bands work on anything above it.
Standard residential SDLT bands as at 2026. Always confirm current rates and your own position with a conveyancer — verify on gov.uk.
Residential Conveyancing
In practice your conveyancer handles all of this as part of the extension. They’ll work out the chargeable consideration, decide whether an SDLT return needs filing, and submit it if so. Even where the calculated tax is nil, a return is sometimes still required depending on the figures — which is exactly the sort of thing you pay a solicitor to get right. You can read HMRC’s own SDLT guidance on gov.uk.
If the property is your home
If the flat is your only or main residence, the position is the simplest of all. Standard residential rates apply to the premium, the nil-rate band protects the first £125,000, and the additional-property surcharge doesn’t come into it because you only own the one home. Almost every owner-occupier extending a flat lease pays no SDLT whatsoever.
I’ve extended leases on flats in my portfolio and the stamp duty question almost always answers itself — the premium is nowhere near £125,000, so there’s nothing to pay. Where it actually matters is prime central London, where a short-lease extension premium can run into hundreds of thousands. If that’s you, get the SDLT modelled before you agree the premium, because it changes the real cost of the deal. For everyone else, it’s a non-issue you can stop worrying about.
Higher Rate Stamp Duty (rented property)
Landlords often assume the 3%/5% higher-rate surcharge for additional properties will catch their lease extension. Usually it won’t. Extending the lease on a property you already own doesn’t increase the number of dwellings in your name, so the surcharge generally isn’t triggered — any SDLT due tends to be at standard rates on the premium. It’s a common misconception worth clearing up, but because the additional-property rules are fiddly, confirm your exact case with a conveyancer. If you’re weighing up the wider economics of leasehold investments, my guide to getting a mortgage on a short lease covers why extending early often pays for itself.
The stamp duty question is separate from the cost of the extension itself. A lease extension already involves a premium to the freeholder, valuation fees, and both sides’ legal costs — often several thousand pounds before any SDLT. Don’t let “no stamp duty” lull you into thinking the extension is cheap. Budget for the whole picture.
Example 1 – Principal Private Residence
Sarah owns the flat she lives in and extends her lease for a premium of £18,000. Because the premium is far below the £125,000 nil-rate band, the SDLT due is £0. There’s nothing to pay and, given the modest figure, no return to file — her solicitor confirms it and the matter is closed.
Example 2 – Buy to Let
James owns a rental flat and extends its lease for a premium of £45,000. Even though it’s an additional property, the higher-rate surcharge isn’t triggered — he’s not acquiring a new dwelling, just extending one he already owns — and the £45,000 premium sits below the £125,000 nil-rate band, so standard-rate SDLT is also zero. He pays the premium and legal costs, but no stamp duty. Only if that premium had run past £125,000 — realistically, a very short lease on a high-value property — would SDLT start to apply. To see how this fits the bigger leasehold picture, read up on why leases run for 99 (or 999) years.
Frequently Asked Questions
Do you pay stamp duty on a lease extension?
Usually not. SDLT only becomes payable on a lease extension if the premium you pay for it exceeds the residential nil-rate band (£125,000 since April 2025). The vast majority of flat lease extensions cost less than that, so no stamp duty is due — though you must still consider whether a return needs filing.
Does the 3% / 5% higher-rate surcharge apply to a lease extension?
Generally no. Extending the lease on a property you already own doesn’t increase the number of dwellings you hold, so the additional-property surcharge usually isn’t triggered. SDLT, if any, tends to be charged at standard rates on the premium. Always confirm your specific case with a conveyancer.
At what premium does SDLT start on a lease extension?
On a residential lease, SDLT on the premium only bites once the premium passes the £125,000 nil-rate band. Below that, the standard rate is 0%. High-value central-London extensions are where it most often becomes relevant.
Do I need to file an SDLT return for a lease extension even if no tax is due?
Sometimes. If the chargeable consideration is below the notification threshold, no return is needed; above it, a return may be required even where the calculated tax is zero. Your conveyancer will handle this as part of the transaction.
This article is general information, not tax advice. SDLT rules and thresholds change — always confirm your position with a qualified conveyancer or check the current rates on gov.uk before acting.
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