Mortgages & Property

Stamp Duty on Second Homes UK 2026: Higher Rates and How to Calculate Your Bill

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Buying an additional residential property in England — whether a holiday home, buy-to-let investment, or second home — now attracts a 5% surcharge on top of standard Stamp Duty Land Tax rates. This significant additional cost dramatically affects the financial case for second property ownership. Here's exactly how to calculate what you'll pay.

The 5% Surcharge Explained

From 31 October 2024, an additional 5% SDLT surcharge applies to purchases of additional residential properties in England. This applies from the very first pound of the purchase price — unlike the standard SDLT bands. On a £250,000 buy-to-let property: standard SDLT = £2,500. Surcharge = 5% of £250,000 = £12,500. Total SDLT = £15,000. Previously (before October 2024) this was a 3% surcharge — the increase to 5% significantly raises the cost of property investment.

Second Home SDLT Calculation Examples

Example 1 — £200,000 buy-to-let: Standard SDLT: 0% on first £125,000 + 2% on next £75,000 = £1,500. Plus 5% surcharge on full £200,000 = £10,000. Total = £11,500. Example 2 — £400,000 second home: Standard SDLT: 0% on £125k + 2% on £125k + 5% on £150k = £12,500. Plus 5% surcharge on full £400,000 = £20,000. Total = £32,500. Use HMRC's SDLT calculator (available at gov.uk) to get your exact figure.
  • •Surcharge applies from first £1, not just above thresholds
  • •Applies in England and Northern Ireland; Scotland and Wales have separate regimes
  • •Scotland: Additional Dwelling Supplement (ADS) is 8% from April 2024
  • •Wales: Higher Residential Rates are 4% surcharge

When the Surcharge Doesn't Apply

The surcharge doesn't apply to: commercial property purchases, property where you're selling your previous main home simultaneously (replacement of main residence), caravans, mobile homes, and houseboats, or purchases under £40,000. If you buy a new main home before selling your old one, you pay the surcharge initially — but can claim a refund of the surcharge within 36 months if you sell the previous main residence within that period.
Does the surcharge apply if my partner already owns a property?+

Yes — if either you or your spouse/civil partner owns another residential property, the surcharge typically applies to your new purchase. Unmarried joint purchasers: the surcharge applies if either buyer owns another property.

Can I get a refund if I've paid the surcharge?+

Yes — if you purchased a new home while still owning your old one (paying the surcharge), you can claim a refund if you sell the previous main home within 36 months of the new purchase. Apply through HMRC within 12 months of the sale.

Impact on Buy-to-Let Returns

The 5% surcharge significantly raises the break-even point for buy-to-let investments. On a £200,000 property with 5% gross yield (£10,000/year rent), the £11,500 SDLT must be earned back from profit before the investment makes money. Combined with Section 24 mortgage interest changes, CGT on eventual sale, and compliance costs, the total acquisition and ownership tax burden is substantially higher than a decade ago. Model all these costs carefully before purchasing.
#stamp duty second home#additional dwelling supplement#buy to let SDLT#property tax UK

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