Stamp duty on second homes and buy-to-let

Stamp duty is a significant cost of buying an investment property, and it is due within 14 days of completion. For anyone who already owns a home, the rates are considerably higher. This guide sets out how the higher rates work in England and Northern Ireland, what they cost at real prices, when money can be claimed back, and how Scotland and Wales differ.

Every rate below is taken from GOV.UK, Revenue Scotland and the Welsh Government, and every worked example is calculated from those published bands.

When the higher rates apply

Stamp Duty Land Tax (SDLT) applies to property purchases in England and Northern Ireland. HMRC charges the higher rates when you buy a residential property for £40,000 or more and it will not be the only residential property worth £40,000 or more that you own, or part own, anywhere in the world.

• Your current home counts if you still own it at the end of the day you complete the new purchase.
• Property overseas counts. A flat abroad worth £40,000 or more is enough to bring a UK purchase into the higher rates.
• Married couples and civil partners are treated as buying together. If either of you would individually pay the higher rates, the whole transaction is charged at them, unless you are permanently separated.
• Joint buyers follow the same logic: if any one purchaser would pay the higher rates, the transaction as a whole does.
• Companies buying residential property pay the higher rates. A separate 17% rate can apply to residential property costing more than £500,000 bought by certain corporate bodies, with reliefs available, including for a property rental business.

The rates in force today

The table shows the residential bands for purchases completing on or after 1 April 2025, which are the rates in force for the 2026/27 tax year. The higher rates are 5 percentage points above the standard rate in every band, and the non-resident surcharge adds a further 2 percentage points on top of all other residential rates.

Because the surcharge is added to every band, the extra cost of buying as an additional property is always 5% of the full price. On a £250,000 purchase that is £12,500 more than a buyer with no other property would pay.

Worked examples

These figures are our own calculations from the GOV.UK bands above. They assume an individual buyer, a freehold or a leasehold purchase with no rent element, and no reliefs. "Standard" means a buyer who will own no other residential property and is not claiming first-time buyer relief.

How the £350,000 figure is built

For a UK resident buying a £350,000 buy-to-let while owning a home:

• 5% on the first £125,000 = £6,250
• 7% on the next £125,000 = £8,750
• 10% on the final £100,000 = £10,000
• Total SDLT = £25,000, an effective rate of just over 7.1% of the price

A non-UK resident buying the same property pays 2% more on the whole price, which is £7,000, giving £32,000. As a cross-check, HMRC's own published example of a £300,000 additional property bought on or after 1 April 2025 comes to £20,000, which the same method reproduces.

To run your own price, use the stamp duty calculator, then carry the figure into the deal analyser so it sits alongside the deposit, fees and rent.

The 2% surcharge for non-UK residents

Since 1 April 2021, non-UK residents buying residential property in England or Northern Ireland pay rates 2 percentage points higher than UK residents. The surcharge applies on top of every other residential rate, including the higher rates for additional properties and the rates for companies.

For individuals, the test is simple to state: you are non-UK resident for SDLT if you were not present in the UK for at least 183 days during the 12 months before your purchase. Days anywhere in the UK count, not only days in England.

The surcharge can be reclaimed. If an individual buyer is later present in the UK for at least 183 days in any continuous 365-day period within the window HMRC sets around the purchase, the return can be amended to reclaim it, within 2 years after the effective date of the transaction. Investors buying from abroad can read more on our overseas investors page.

Replacing your main home: when you can claim a refund

The higher rates are aimed at additional property, not at people moving home. The timing of your sale decides how this works in practice:

• If the new property replaces your main residence and the old one has already been sold, the higher rates do not apply.
• If you have not sold your previous main home by the day you complete, you pay the higher rates on completion.
• If you then sell or give away your previous main home within 3 years of buying the new one, you can apply to HMRC for a refund of the higher-rate element.
• The refund must be claimed within 12 months of whichever is later: the date you sold your previous home, or the filing date of the SDLT return for the new one.

This relief is about main homes only. Selling one buy-to-let and buying another does not unlock a refund, because neither property was your main residence.

When stamp duty is paid

An SDLT return must be sent to HMRC, and the tax paid, within 14 days of completion. In most purchases your solicitor or conveyancer files the return and pays on the day of completion, so the cash needs to be with them beforehand.

The rates that apply are those in force on the effective date of the transaction, which in most cases is completion. That matters for off-plan purchases, where completion can be months or years after exchange and rates can change in between.

Scotland and Wales use different taxes

SDLT does not apply in Scotland or Wales. Each has its own tax, its own bands and its own surcharge for additional homes, and the 2% non-resident surcharge is an England and Northern Ireland rule.

Scotland: LBTT and the Additional Dwelling Supplement

Land and Buildings Transaction Tax (LBTT) is administered by Revenue Scotland. The residential bands are 0% up to £145,000, 2% from £145,001 to £250,000, 5% from £250,001 to £325,000, 10% from £325,001 to £750,000 and 12% above £750,000.

The Additional Dwelling Supplement (ADS) is charged on top. For transactions on or after 5 December 2024 it is 8% of the purchase price, applied to the whole price rather than band by band. It does not apply where the price is less than £40,000. If you buy a new main residence before selling your old one, a repayment can be claimed if the previous property is sold within 36 months of buying the new one.

Wales: Land Transaction Tax

Land Transaction Tax (LTT) is administered by the Welsh Revenue Authority. The higher residential rates, which generally apply to purchases of additional residential property, have been in force since 11 December 2024: 5% up to £180,000, 8.5% from £180,001 to £250,000, 10% to £400,000, 12.5% to £750,000, 15% to £1.5 million and 17% above that. The main residential rates start with a 0% band up to £225,000.

The same £250,000 purchase in each nation

Our calculations for a UK-resident individual buying a £250,000 additional property, using each authority's published rates:

The gap widens or narrows at other prices, so compare like for like before choosing between cities in different nations. Our Glasgow and Edinburgh guides cover the Scottish markets in more depth.

Buying through a company

Companies pay the higher rates from the first pound on residential purchases, and certain corporate bodies can face a 17% rate on residential property costing more than £500,000 unless a relief applies. Moving property you already own into a company connected with you is a purchase in its own right for SDLT, charged on at least the market value. Our limited company buy-to-let guide explains the wider trade-offs.

Building stamp duty into the plan

Stamp duty sits with the deposit as cash needed by completion. Treat it as part of the price when judging yield: a £250,000 flat bought as an additional property costs £265,000 before legal fees and finance costs. The full picture of buying costs is in our guide to investing in UK property. Once you own the property, PROXERA keeps the purchase costs alongside the rent, mortgage and documents, so the return you track reflects what you actually paid.