Stamp duty has been around for a long time, but applying different rates for a second property is a relatively new concept, introduced by the government in April 2016. This guide addresses the common query – how much is stamp duty on a second home?
The original version of stamp duty, which began way back in 1694 (to fund a war against France, at the time) was essentially a tax on written documents, requiring a physical stamp. Much more recently, the government introduced SDLT, the land transaction version of stamp duty we are more familiar with today, on 1 December 2003.
Read on to learn all about stamp duty on second properties and the various exemptions.
Summary: Second property stamp duty
- The amount of stamp duty you pay depends on the purchase price and whether it is a main home, first-time buyer purchase or additional property.
- Stamp duty is charged in bands, so the government taxes different portions of the price at different rates.
- Second homes usually attract a 5% surcharge, with further rules for non-UK residents.
- You may be able to reclaim the 5% second‑home surcharge if the property you buy replaces your main residence and you sell your previous home within 36 months.
- Other scenarios can also change how much stamp duty applies to a second home.
What is stamp duty?
The full name is Stamp Duty Land Tax or SDLT – you pay it when buying property or land in England and Northern Ireland, at varying rates, when the purchase price goes above specific thresholds.
In contrast, Scotland has Land and Buildings Transaction Tax (LBTT) while Wales has Land Transaction Tax (LTT), with different rates compared to England and Northern Ireland.
You pay stamp duty within 14 days after the purchase completes, usually via your solicitor or conveyancer, otherwise HMRC may charge you penalties and interest.
Factors such as the purchase price, property type and whether you already own another home affect the amount of stamp duty you pay.
Stamp duty on a single property
There are several stamp duty tax bands, so the government taxes each ‘slice’ of the purchase price at different residential property rates. Using the current rates, set in April 2025, the stamp duty thresholds below are for one property with no relief or exemptions:
Single property stamp duty rates – with no relief or exemptions:
- 0% SDLT – up to the first £125,000 of the property purchase price
- 2% SDLT – on the next £125,000 (i.e. £125,001 to £250,000)
- 5% SDLT – on the next £675,000 (£250,001 to £925,000)
- 10% SDLT – on the next £575,000 (£925,001 to £1.5m)
- 12% SDLT – on the remaining amount (£1.5 million+)
As an example, for a £500,000 property in London, you would pay £0 stamp duty on the first £125,000 but £2,500 on the next £125,000 (i.e. 2%) and £12,500 on the final £250,000 (i.e. 5%), giving a total of £15,000.
First-time buyers: Stamp duty
However, if this £500,000 property (or a less expensive one) is a first-time buyer purchase, the calculation changes. For first-time buyers, stamp duty rates are:
First-time buyer relief rates:
- 0% SDLT – up to the first £300,000 of the property purchase price
- 5% SDLT – on the next £200,000 (£300,001 to £500,000)
So if you’re a first time buyer of the £500,000 property, the stamp duty you owe is a total of £10,000 calculated as £0 on the first £300,000 and £10,000 on the remaining £200,000 (i.e. 5%).
This relief only applies to properties with a £500,000 or lower purchase price. If you’re a first-time buyer purchasing a property worth £550,000 then there is no first-time buyer relief and the stamp duty rates in the previous section apply.
Stamp duty on second homes
If purchasing a property means you will now own more than one, you usually need to pay an additional 5% on top of the ‘single property’ stamp duty rates mentioned earlier.
This stamp duty surcharge applies to all second properties including second homes or buy-to-lets with a purchase price of £40,000 and above.
Second property stamp duty rates:
- 5% SDLT – up to the first £125,000 of the property purchase price
- 7% SDLT – on the next £125,000 (i.e. £125,001 to £250,000)
- 10% SDLT – on the next £675,000 (£250,001 to £925,000)
- 15% SDLT – on the next £575,000 (£925,001 to £1.5m)
- 17% SDLT – on the remaining amount (£1.5 million+)
For non-UK residents, there is an additional 2% surcharge on top of these second property stamp duty rates. For the purposes of SDLT, you count as non-resident if you’re not present in the UK for at least 183 days in the 12 months before the property purchase.
There are several caveats to these second property stamp duty rates.
Stamp duty second property exemptions
The main exemption to be aware of is if you technically own two properties but only because you haven’t yet finished selling the first one.
You don’t pay the additional 5% stamp duty surcharge if:
- The property you’re buying is replacing your main residence
- You sell your previous main residence within 36 months of completing your new purchase
However, If you haven’t yet sold your main residence by the day you complete your new purchase, you still have to pay the 5% stamp duty surcharge (because you own two properties). When you then sell your previous main residence, you can claim a refund, as long as that sale goes through within 3 years.
When buying a property through a limited company, there can also be some potential stamp duty savings in certain situations.
There are other scenarios where you may not need to pay stamp duty at all, such as if you:
- Receive the property in a will
- Become the property owner after a divorce
- Buy a caravan, motorhome or houseboat
Here is the full government guidance on stamp duty transactions that don’t need an SDLT return.
Renting, owning a buy-to-let, new purchases and stamp duty surcharges
What happens if you are renting a home (i.e. your main residence) and also own a buy-to-let property (which was never your main residence), but then buy a new property you’re going to live in?
So you’re changing your main residence and will now own it, rather than paying rent to live there. It means you’re still only living in one place and have one main residence, but the difference is that you now own two properties – this new one and the buy-to-let.
This does not remove your 5% stamp duty surcharge liability. Even if you sell the buy-to-let within three years, you are not entitled to apply for a refund of the 5% stamp duty surcharge.
That’s because selling the buy-to-let does not mean that you’re replacing your main residence, in this scenario:
- Since you are renting, you do not have a ‘major interest’ in a previous main residence that you are selling.
- HMRC will see the new purchase as you adding a property to your portfolio, which includes the buy-to-rent property, rather than you replacing your current home or main residence.
An exception to this could be if you previously lived in the buy-to-let property as your only or main residence.
You could be exempt from the 5% stamp duty surcharge if you buy your new home and sell the buy-to-let property within three years, if it means you have replaced your main residence. For more details, here is the government guidance on how to apply for a refund of the higher stamp duty rates.
Final thoughts: Stamp duty on a second home
Some people ask questions such as: How can I avoid stamp duty on my second home? And will second home stamp duty be scrapped in the near future?
In terms of how to avoid stamp duty on second homes, take a look at the section above – ‘stamp duty second property exemptions’ for more details. If you will only temporarily have a second home, because you are still selling the first, you can claim a refund on the additional 5% stamp duty surcharge.
There are no signs that the government will remove this surcharge policy on second homes in general though. With reports of house-building in London falling by 84% in a decade and the UK housing gap reaching 6.5m homes, the government will likely continue to de-incentivise the ownership of second homes.
If you found this guide useful, other popular guides include:
The team at Fine Living stays updated with the very latest legislation – including any changes to stamp duty – and property market trends, so please don’t hesitate to contact us with any queries.
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