Purchasing a second property comes with additional costs, including a Stamp Duty surcharge, that can significantly increase your overall outlay.
What is Stamp Duty on second homes?
When you buy a residential property in England or Northern Ireland, Stamp Duty Land Tax (SDLT) applies to any portion of the purchase price above a set threshold. This applies whether the property is freehold, new or existing leasehold, being purchased through a shared ownership scheme, or when taking on a mortgage or buying a share in a house.
When it comes to owning more than one property, there is an extra 5% surcharge on top of the standard rates for the second or additional properties.
This surcharge usually applies to:
- Buy-to-let investors
- Holiday home purchasers
- Homebuyers who acquire a new property before selling their existing one – in certain circumstances, you may be eligible for a refund if you sell your previous main residence within three years of the purchase.
How much Stamp Duty will I have to pay?
The Stamp Duty rate for second homes combines the standard SDLT rate with the 5% surcharge for second properties. This rate can be higher depending on the price of the property.
| Property Price | Standard SDLT Rate | Additional homes SDLT rate |
| 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% |
| Above £1.5 million | 12% | 17% |
Example: Buying a second home for £350,000:
- Standard SDLT: 5% of £100,000 (the portion above £250,000) = £5,000
- Additional 5% surcharge: 5% of £350,000 = £17,500
- Total Stamp Duty: £22,500
You can calculate how much Stamp Duty Land Tax (SDLT) you may have to pay here.
For more details and official rates, visit the government website here.
When the second home stamp duty surcharge may not apply
You may not have to pay an additional property stamp duty surcharge if all of the following apply:
- The property you are buying will be your new main residence
- Your previous main residence was sold within 36 months of completing your new purchase
If you haven’t sold your main residence by the time you complete your new purchase, you’ll be classed as owning two properties and must pay the additional surcharge. However, you may be eligible for a refund if you meet the conditions outlined above.
For personalised advice on Stamp Duty for additional residential properties or any other property matter, phone the team 0333 3055 249 or email info@leadingpropertylawyers.co.uk
