Stamp duty on second home purchases: rates, examples and refunds

How much stamp duty you pay on a second home

Stamp duty on a second home in England and Northern Ireland is the normal Stamp Duty Land Tax (SDLT) plus 5 percentage points on every band, for completions on or after 31 October 2024. According to GOV.UK, you usually pay the higher rates if buying the new residential property means you will own more than one.

Scotland and Wales charge their own taxes with their own surcharges:

• Scotland: Land and Buildings Transaction Tax (LBTT) plus an 8% Additional Dwelling Supplement (ADS) on the whole price, for transactions on or after 5 December 2024.
• Wales: Land Transaction Tax (LTT) charged on a separate higher residential rates table, starting at 5%, from 11 December 2024.

The surcharge applies to holiday homes, buy-to-let properties and flats bought for a child alike: the test is what you own on the day you complete, not what you plan to do with the property. On a £300,000 purchase the second home bill is £20,000 in England, £28,600 in Scotland and £19,950 in Wales, against £5,000, £4,600 and £4,500 for someone replacing their main home.

Work out your own figure with the stamp duty calculator, which has an "additional property" option for all three nations.

Higher rates of SDLT for additional properties in England and Northern Ireland

The higher rates of SDLT run from 5% to 17% across five bands, and they apply to the whole price, starting from the first pound. HMRC raised the surcharge from 3% to 5% for transactions with an effective date (usually completion) on or after 31 October 2024. The standard bands behind it have applied since 1 April 2025.

The surcharge adds exactly 5% of the price to the bill, so a £200,000 flat costs £10,000 more than it would as a main home, and a £500,000 house £25,000 more. Contracts exchanged before 31 October 2024 that completed afterwards could fall under transitional rules, which HMRC set out in its policy paper on the change.

Worked example: stamp duty on a £300,000 second home in England, Scotland and Wales

A £300,000 second home costs £20,000 in SDLT in England, £28,600 in LBTT and ADS in Scotland, and £19,950 in LTT in Wales. These figures come from the site's stamp duty engine with a price of £300,000, the buyer type set to "Additional property" and a UK-resident buyer, so you can reproduce them in the calculator.

Scotland costs most at this price because the ADS is a flat 8% of the whole price rather than a band-by-band uplift. The gap widens as the price rises: at £400,000 the engine gives £30,000 in England, £45,350 in Scotland and £29,950 in Wales.

If you are borrowing for a rental, add the tax to your deposit before you check the numbers in the buy-to-let mortgage calculator, because lenders size the loan on the rent, not on your total cash outlay.

Scotland: the 8% Additional Dwelling Supplement

The Additional Dwelling Supplement is 8% of the total purchase price for transactions on or after 5 December 2024, according to Revenue Scotland. It is charged on top of the normal LBTT bands (0% to £145,000, 2% to £250,000, 5% to £325,000, 10% to £750,000 and 12% above).

• ADS is not due where the price is under £40,000.
• You pay it if you already own one or more dwellings anywhere in the world when you buy another, unless the purchase replaces your main residence.
• Married couples, civil partners and cohabitants living together as though married, with their children under 16, are treated as one economic unit. This is wider than the rule in England, which covers only spouses and civil partners.
• For transactions from 1 April 2024, a share of a dwelling counts only if the share itself is worth £40,000 or more.
• Every dwelling a company buys for £40,000 or more carries ADS, even if the company owns nothing else.

Wales: the higher residential rates of Land Transaction Tax

Wales charges a separate higher residential rates table for second homes and buy-to-lets: 5% up to £180,000, 8.5% to £250,000, 10% to £400,000, 12.5% to £750,000, 15% to £1.5 million and 17% above, for transactions on or after 11 December 2024. According to the Welsh Revenue Authority, you usually pay these rates when you buy a residential property worth £40,000 or more and you already own one or more other properties.

The main residential rates in Wales start with a 0% band up to £225,000, so the higher rates cost more in relative terms on cheaper homes. A £200,000 cottage bought as a holiday let costs £10,700 in LTT; the same cottage bought as a replacement main home costs nothing. Wales has no first-time buyers' relief.

When the second home surcharge applies, and when it does not

The higher rates apply when, at the end of the day you complete, you own (or part-own) another residential property worth £40,000 or more anywhere in the world and you have not sold your previous main home. GOV.UK spells out the "anywhere in the world" test, so a flat in Spain or a family house abroad counts in the same way as a UK buy-to-let.

Common situations:

• Buying your first ever property as a buy-to-let. You do not pay the surcharge, because you own nothing else. You also do not get first-time buyer relief, because HMRC requires you to intend to live in the property as your main residence. On £300,000 in England you pay the standard £5,000.
• Buying a new main home before selling the old one. You pay the higher rates at completion, then claim the surcharge back when the old home sells (see the next section).
• Selling your main home on the same day, or before you buy. The higher rates do not apply, as long as you already own no other property worth £40,000 or more.
• Owning a share of a property. Part-ownership counts. GOV.UK's test for England and Northern Ireland is whether the property you own or part-own is worth £40,000 or more; in Scotland, for transactions from 1 April 2024, it is the value of your share.
• A property held for a child under 18. GOV.UK treats the parents as the owners, even if the property is held in trust.
• Properties under £40,000. A purchase under £40,000 does not attract the surcharge in England, Northern Ireland or Scotland, and an existing property worth under £40,000 does not trigger it on your next purchase.

Replacing your main home: the 3-year refund and the deadline to claim

If you buy a new main home before selling your old one, you pay the higher rates at completion and can reclaim the surcharge once the old home is sold, provided the sale happens within 3 years of buying the new one. According to GOV.UK, for sales on or after 29 October 2018, HMRC must receive your refund request within 12 months of the sale of the previous main home or 12 months of the filing date of the SDLT return, whichever is later.

Worked example with dates. You complete on a £300,000 house in England on 2 November 2026 and move in, but your old home has not sold. You pay £20,000. The SDLT filing date is 14 days after completion, 16 November 2026. Your old home sells on 15 June 2027, well inside the 3 years that end on 2 November 2029. You can reclaim £15,000, the difference between the £20,000 you paid and the £5,000 due at standard rates. Your deadline is the later of 15 June 2028 and 16 November 2027, so HMRC must receive your claim by 15 June 2028.

You claim online through a Government Gateway account or on form SDLT16 by post. HMRC asks for the SDLT unique transaction reference number, the purchase date, the sale date, the address of the home you sold and the name of its buyer, and your bank details. The online form cannot be saved part-way, so gather these first.

Revenue Scotland says its legislation gives it no power to accept exceptional circumstances if the sale falls outside 36 months. HMRC allows a longer period where the sale was held up by government-imposed restrictions or the actions of a public authority, and the Welsh Revenue Authority says a longer period may apply in certain situations.

Married couples, civil partners and joint buyers

Married couples and civil partners are treated as one unit for the second home surcharge in all three nations: if either spouse owns another property, the purchase carries the higher rates even when only the other spouse is buying. GOV.UK says the rules "apply to you both as if you were buying the property together", unless you are separated in circumstances likely to be permanent.

Joint buyers who are not married are tested one by one. According to GOV.UK, if any buyer individually has to pay the higher rates, the whole transaction is charged at the higher rates, not only that buyer's share. So a first-time buyer who buys with a partner who already owns a flat loses both first-time buyer relief and the standard rates on the whole price.

Scotland goes further and includes cohabitants living as though married. If you and your partner are not married and one of you owns a buy-to-let, buying a home in England in the other partner's sole name avoids the surcharge; buying it in Scotland does not.

Inherited property: the 50% share and 3-year rule

An inherited share of 50% or less in a property is ignored for the SDLT higher rates for 3 years from the date you inherit it. HMRC's Stamp Duty Land Tax Manual (SDLTM09795) sets the condition that your share, together with any share held by your spouse or civil partner, must not exceed half of the property at any point in those 3 years.

HMRC's own illustration is two brothers who each inherit 50% of their parents' house. If one of them buys a flat within 3 years of inheriting, the higher rates do not apply to that flat, because his share never went above 50%. If he had inherited the whole house, or bought his brother out, the higher rates would apply.

Wales has a matching rule: an inherited interest of 50% or less counts only after 3 years, unless it increases. Scotland handles inheritance differently: from 1 April 2024, an inherited share counts only if the value of the share is £40,000 or more, and a dwelling inherited between exchange and completion can be disregarded.

Buying a second home or buy-to-let through a limited company

A company pays the higher rates on every residential purchase of £40,000 or more, even its first, and can pay a flat 17% of the whole price on homes costing more than £500,000. According to GOV.UK, the 17% rate for corporate bodies has applied since 31 October 2024; it was 15% before.

The 17% rate does not apply where the property is used in a qualifying property rental business, property development or trading, or a few other listed uses such as employee accommodation or a farmhouse. A limited company that buys a house to let to unconnected tenants usually pays the ordinary higher rates instead.

Example. A company buys a £600,000 house. If it is let as part of a genuine rental business, the higher rates give £50,000 (site engine: £6,250 + £8,750 + £35,000). If the house is for a director to live in and no relief applies, the flat rate gives 17% of £600,000, which is £102,000. In Scotland the company pays ADS on each dwelling, and in Wales it pays the higher residential rates.

Non-UK residents pay 2% more in England and Northern Ireland

Non-UK resident buyers pay a further 2% surcharge on residential property in England and Northern Ireland, on top of all other SDLT rates including the higher rates, for purchases from 1 April 2021. According to GOV.UK, an individual is non-resident for this test if they were in the UK for fewer than 183 days in the 12 months before the purchase.

A non-resident buying a £300,000 second home in England pays £26,000, not £20,000 (site engine: 7%, 9% and 12% across the three bands). You can reclaim the 2% if you are in the UK for at least 183 days in any continuous 365-day period that starts no earlier than 364 days before completion and ends no later than 365 days after it, by amending the SDLT return within 2 years of completion. Scotland and Wales have no non-resident surcharge.

Is stamp duty on a buy-to-let tax deductible?

Stamp duty on a buy-to-let cannot be deducted from your rental income, but it is added to the property's cost when you work out Capital Gains Tax on a later sale. HMRC's Property Income Manual (PIM2120) lists the costs of acquiring a property as capital costs that you cannot deduct from rent. HMRC's Capital Gains Manual (CG15250) lists stamp duty and SDLT among the allowable incidental costs of acquisition.

On a £300,000 buy-to-let in England, the £20,000 of SDLT raises your base cost to £320,000 plus legal fees, which cuts the taxable gain by £20,000 when you sell. The guide to Capital Gains Tax on selling a second home works through the sale side, including the 60-day reporting deadline.

Paying the tax, and what to do next

The return and payment deadline is 14 days after completion for SDLT in England and Northern Ireland, and 30 days after the day after completion for LBTT in Scotland and LTT in Wales. Penalties and interest apply if you miss it, so budget for the tax as cash alongside your deposit and legal fees. On a £300,000 second home in England that is £20,000 due by the 14th day.

1. Run your price through the stamp duty calculator with "Additional property" selected, and again as "Moving home" to see the amount you could reclaim.
2. List every property you and your spouse or civil partner own or part-own anywhere in the world on the completion date, with rough values against the £40,000 test.
3. If this is a replacement main home, diary the 3-year sale deadline and the refund deadline from the table above.
4. If you are letting the property, check the rent covers the loan in the buy-to-let mortgage calculator before you exchange.