# Do You Pay Stamp Duty on Gifted Property in the UK?

Discover when Stamp Duty Land Tax (SDLT) is due on a gifted property in the UK. Learn how transferred mortgages, second homes, and company transfers affect your tax.

**Published:** 2026-07-05  
**Updated:** 2026-07-05  
**Source:** https://aztajournal.com/gb/stamp-duty-gifted-property

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> Whether you pay Stamp Duty Land Tax (SDLT) on a gifted property in the UK depends entirely on whether a mortgage is transferred with the gift. Pure gifts without debt are completely tax-free, while properties with outstanding mortgages trigger potential liabilities.

## Key Takeaways: SDLT on Gifted Property

Understanding Stamp Duty rules when receiving a property as a gift can help you avoid unexpected tax bills. The following points summarise the key rules established by HMRC under UK tax law:

- **Mortgage-free gifts** are entirely exempt from Stamp Duty Land Tax.
- **Gifts with outstanding mortgages** trigger SDLT if the transferred debt exceeds £125,000.
- **Second home buyers** must pay a 5% additional surcharge if they assume a mortgage debt over £40,000.
- **Corporate transfers** are taxed on the full open-market value of the property, not just the mortgage balance.
- **Additional UK taxes** like Capital Gains Tax and Inheritance Tax may apply to the donor.

## Do you pay stamp duty on a gifted property in the UK?

You do not pay Stamp Duty Land Tax on a gifted property if it is transferred to you completely free of any associated debt or payment. When a property is passed as a pure gift, there is no exchange of money, meaning no tax is due.

However, if you take over an outstanding mortgage as part of the transaction, HMRC treats this debt transfer as a form of payment. In these cases, the person receiving the property becomes liable for stamp duty based on the value of that mortgage.

## What is 'chargeable consideration' on a gift?

Under the Finance Act 2003, **chargeable consideration** represents anything of monetary value given in exchange for a property transfer. This legal term includes cash payments, the release of a debt, or the assumption of an existing mortgage by the new owner of the asset.

For standard residential gifts, the tax is calculated solely on this chargeable consideration. It is not assessed against the total market value of the property unless the transfer is made to a limited company.

## When does stamp duty apply to gifted property?

Stamp duty applies to gifted properties only under specific financial and ownership conditions determined by the nature of the transaction. If the transaction involves an active mortgage, multiple owned properties, or a company transfer, tax liabilities will arise.

| Scenario | SDLT Due? | Taxable Basis |
| --- | --- | --- |
| Outright gift with no mortgage to an individual | No | £0 (Zero chargeable consideration) |
| Gift with mortgage ≤ £125,000 assumed by recipient | No | Falls within the 0% standard tax band |
| Gift with mortgage > £125,000 assumed by recipient | Yes | Calculated on the assumed mortgage balance |
| Recipient already owns another house + mortgage > £40,000 | Yes | Assumed mortgage balance plus 5% surcharge |
| Gift of a residential property to a limited company | Yes | Full open-market value of the property |

### How much SDLT will I pay if I take on a mortgage?

If you take on an existing mortgage when receiving a gifted property, you pay SDLT on the outstanding debt balance above the £125,000 threshold. The tax is calculated using the standard UK residential tax bands for England and Northern Ireland.

| Portion of Mortgage Value | Standard SDLT Rate (2026/27) |
| --- | --- |
| Up to £125,000 | 0% |
| £125,001 to £250,000 | 2% |
| £250,001 to £925,000 | 5% |
| £925,001 to £1,500,000 | 10% |
| Over £1,500,000 | 12% |

### What happens if I already own another residential property?

When you already own another home, any new property transaction that leaves you owning multiple residential dwellings is subject to higher rates. Since 31 October 2024, the **5% additional dwellings surcharge** is applied on top of the standard SDLT rates.

This extra 5% surcharge is triggered if you assume a mortgage balance exceeding £40,000 on the gifted property. If there is no mortgage or the debt is below £40,000, the surcharge is not activated.

### How is a property gift to a limited company taxed?

When a residential property is gifted to a limited company, HMRC ignores the mortgage balance and taxes the transaction on its full market value. This prevents individuals from avoiding stamp duty by transferring valuable properties into corporate entities.

Furthermore, a flat rate of 17% overall applies to residential properties worth more than £500,000 that are acquired by corporate bodies and non-natural persons. This higher rate is designed to discourage corporate ownership of high-value residential homes.

## What other taxes apply when transfering property as a gift?

Gifting property goes beyond stamp duty, as the UK tax system also imposes Capital Gains Tax (CGT) on the donor making the gift. The donor must report and pay any CGT liability to HMRC within 60 days of completing the property transfer.

Under the 7-year rule, the gift is also treated as a potentially exempt transfer for Inheritance Tax (IHT). If the donor dies within seven years of making the gift, the value of the property may be taxed as part of their estate.

### Do you pay stamp duty if someone gifts you a house?

No, you do not pay Stamp Duty Land Tax if a house is gifted to you outright without any mortgage, cash exchange, or other form of debt liability.

### Is a gifted house subject to SDLT if there is a mortgage?

Yes. If there is a mortgage, the outstanding debt you take on acts as the taxable consideration. You will pay SDLT on that mortgage balance according to standard rates if it exceeds £125,000.

### How does stamp duty work if my parents gift me a second home?

If your parents gift you a home and you already own a residential property, you face standard SDLT rates plus a 5% surcharge, provided you take on a mortgage balance of more than £40,000.

### Can you avoid stamp duty by gifting property?

You can legally avoid SDLT only if the property is transferred completely free of debt and no other form of chargeable consideration is exchanged. Artificial arrangements to bypass debt rules are heavily penalised by HMRC.

### How is SDLT calculated when gifting a property to a limited company?

Gifts to a limited company are always taxed on the full open-market value of the property, rather than the mortgage balance, using corporate residential rates.