Stamp duty on a second home
Buying a second home or a buy-to-let in England or Northern Ireland adds a 5% surcharge to every stamp duty band. Here’s who pays it, what it costs at different prices, and when you can get it back.
Who pays the higher rates?
You normally pay the higher rates of Stamp Duty Land Tax (SDLT) if, at the end of the day you complete, you:
- own another residential property worth £40,000 or more, anywhere in the world, and
- aren’t replacing your main residence.
Married couples and civil partners are treated as one unit, so if either of you owns a property, the purchase is an additional one. Buy-to-lets, holiday homes and homes bought for family members usually count.
Current rates
| Part of the price | Main home | Second home or buy-to-let |
|---|---|---|
| Up to £125,000 | 0% | 5% |
| £125,001 to £250,000 | 2% | 7% |
| £250,001 to £925,000 | 5% | 10% |
| £925,001 to £1.5 million | 10% | 15% |
| Over £1.5 million | 12% | 17% |
Each rate applies only to the part of the price in that band. Purchases under £40,000 pay no SDLT. Non-UK residents pay a further 2% on every band.
Worked examples
| Price | Main home | Second home | Extra cost |
|---|---|---|---|
| £150,000 | £500 | £8,000 | £7,500 |
| £250,000 | £2,500 | £15,000 | £12,500 |
| £400,000 | £10,000 | £30,000 | £20,000 |
The surcharge is simply 5% of the whole price, which is why it matters so much on a buy-to-let’s returns. Run your own figures in the stamp duty calculator.
Replacing your main home
If you buy a new main home before you’ve sold the old one, you pay the higher rates at first. If you then sell the previous main home within three years, you can claim the surcharge back. The claim must be made within 12 months of the sale, or within 12 months of the filing date of the SDLT return, whichever is later.
Buying before you sell is also a common use of a bridging loan, though bridging on a home you’ll live in is regulated and needs an FCA-authorised firm.
Limited companies
- A company pays the higher rates on every residential purchase, even its first.
- On a dwelling over £500,000, a company can face a flat 17% rate unless a relief applies, such as for a genuine property rental business.
- Moving properties you already own into a company is treated as a sale, so SDLT and Capital Gains Tax can both apply. Take tax advice first.
Portfolio and mixed-use purchases
- Multiple Dwellings Relief was abolished for purchases completing from 1 June 2024.
- Six or more dwellings bought in a single transaction can be treated as non-residential, which uses the lower non-residential rates.
- Mixed-use property, such as a shop with a flat above, uses the non-residential rates and has no surcharge.
Wales and Scotland have their own taxes: Land Transaction Tax and Land and Buildings Transaction Tax.
Sources: HMRC guidance on residential SDLT rates and higher rates for additional properties.
Frequently asked questions
How much is stamp duty on a second home?
In England and Northern Ireland, the normal bands plus a 5% surcharge on each band: 5% up to £125,000, 7% to £250,000, 10% to £925,000, 15% to £1.5 million and 17% above. On a £250,000 second home that is £15,000.
Can I get the stamp duty surcharge back?
Yes, if you bought a new main home before selling your old one and you sell the old one within three years. You claim the refund from HMRC.
Do limited companies pay the 5% surcharge?
Yes. A company pays the higher rates on every residential purchase, including its first.
Does a buy-to-let pay the higher rates?
Usually yes. If you already own a residential property worth £40,000 or more, a buy-to-let purchase pays the higher rates.
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This guide is general information, not tax advice. Tax rules change and depend on your circumstances; check GOV.UK and take advice from a qualified tax adviser before you act. DasLend is an introducer only and does not lend, advise or arrange finance.