Stamp Duty Land Tax was introduced in December 2003 and replaces the old stamp duty on purchases of flats, houses and other land and buildings.
The Tax is payable only by buyers (not sellers) and is calculated as a percentage of the total purchase price of the property and is graded into bands.
The current bands for the tax year 2010/2011 are 0% paid at 0 – £125,000, 1% paid on properties costing between £125,000 and £250,000, 3% between £250,000 and £500,000 and 4% for more than £500,000.

Stamp Duty Land Tax is paid on the whole value of a property, so if you buy a property costing £251,000, you would pay £7,530 not just the amount over the threshold as you would do with income tax. This jump means if your property costs £250,000 you will pay £2,500, if it costs £250,001 you will pay £7500.03.
The sudden leap in bills occurs at each of the thresholds.
The bands were changed in the 2010 Budget
Incentive for First Time Buyers . First-time buyers can avoid stamp duty altogether on purchases up to £250,000 if they buy before 25 March 2012. This is only if you have never owned a house or flat in the UK or anywhere else in the world. If you are buying with someone else they must never have owned property before either. This higher threshold applies to purchases made on or after 25 March 2010 and before 25 March 2012

IMPORTANT – A new 5% threshold on property purchased above £1m will be introduced from 6 April 2011.
As the buyer of the property, you are responsible for completing the land transaction return and paying the SDLT.
However, in practice, your solicitor or licensed conveyancer will usually handle this for you and send it to HMRC on your behalf.
You should check that all the information on the form is correct and complete before signing the declaration.