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If you are buying an additional property or are buying a home and may end up owning two properties, you have to pay extra stamp duty. Here’s everything you need to know.
Anyone buying an additional residential property worth more than £40,000 will usually have to pay the additional stamp duty on second homes. This applies whether you’re buying a second home as an investment buy-to-let, for a holiday home or any other purpose.
You have to pay the extra rate even if the property you already own is abroad. It also applies if you only own a share in a property.
Stamp duty on second homes in the UK is higher than on a primary residence. An increase in the surcharge in England and Northern Ireland came into effect on October 31st 2024 with an increase from 3% to 5% surcharge on top of standard rates, applicable to properties costing over £40,000. Wales has put their additional rate up to 5% in December 2024. In Scotland, there is an additional 4% surcharge on top of standard rates.
| Purchase price | Stamp duty rate | Stamp duty rate for additional properties |
|---|---|---|
| Up to £125,000 | 0% | 5% |
| £125,001 to £250,000 | 2% | 7% |
| £250,001 to £925,000 | 5% | 10% |
| £925,001 up to £1.5 million | 10% | 15% |
| Over £1.5 million | 12% | 17% |
LBTT rates in Scotland:
| Purchase price | LBTT rate | LBTT rate for additional properties |
|---|---|---|
| Up to £145,000 | 0% | 6% |
| £145,001 to £250,000 | 2% | 8% |
| £250,001 to £325,000 | 5% | 11% |
| £325,001 to £750,000 | 10% | 16% |
| Over £750,000 | 12% | 18% |
Higher rates in Wales have increased from 11 December 2024:
| Purchase price of property | Stamp duty rate for additional properties |
|---|---|
| Up to £180,000 | 5% |
| £180,001 up to £250,000 | 8.5% |
| £250,001 to £400,000 | 10% |
| £400,001 to £750,000 | 12.5% |
| £750,001 to £1.5m | 15% |
| Over £1.5m | 17% |
To calculate exactly how much stamp duty you will need to pay, use our stamp duty calculator.
There are a few cases where you won’t have to pay the additional stamp duty on second homes:
Use our stamp duty calculator to work out how much stamp duty you need to pay.
If you don’t own any property but decide to purchase a buy-to-let property as a first time buyer, then you won’t pay the stamp duty for second homes (normal stamp duty rates will apply). That’s because you’ll only own one property. However, you cannot claim first time buyer stamp duty relief on a buy-to-let property.
You will pay if you have a part-share in another property, have inherited a property or are buying with someone else who already owns a property.
This is where things can get a little complicated.
If the property you are purchasing is going to replace your main residence, then the additional stamp duty rate isn’t payable. But, you have to sell your original main residence at the same time in order to get this exemption.
If there’s a delay between buying your new main residence and selling your previous main residence, you will probably have to pay the higher rates of Stamp Duty as you’ll now own two properties.
However, if you sell your previous main home within three years of buying your new home you might be able to apply for a refund(Opens in a new window) of the higher tax rate you paid when you purchased your new home.
You can request a refund for the amount above the normal Stamp Duty rates if:
If you are in doubt you should call HMRC on 0300 200 3510.
Unlike with other taxes you don’t have the luxury of selecting which of your properties is your main residence. If you only live at one home, then that is your main residence for stamp duty purposes.
If you spend time at more than one, then HMRC decides which is your main residence. It will consider several factors including:
You are liable for the 5% additional stamp duty even if the only other property you own is abroad. So, a holiday home in Tuscany or a timeshare in Florida will mean you pay the stamp duty for second homes rate, even if you are buying your first home in the UK.
For stamp duty purposes a married couple, or civil partners, are classed as one unit by HMRC. So, if one owns a buy-to-let property and the other buys a property the second home stamp duty rate still applies. This can make things expensive if you are separating and need to buy another home for one partner.
There are special rules in place for this. If Partner A moves out of the marital home and a ‘property adjustment order’ is in place to hand the home over to Partner B, then the additional stamp duty rate does not apply.
If you haven’t organised a ‘property adjustment order’ – your divorce solicitor will help you with this – then you do have to pay the additional stamp duty rate. But, you can claim a refund if you sell your share in the marital home within three years of when you moved out.
You can find out more with our guide to what happens to your home when you separate.
It depends on how much you have inherited. If someone leaves a property in their will and you become the sole owner you have to pay the additional stamp duty if you buy another property.
But, if you have only inherited a share of a property you may be exempt. According to legislation if you inherit 50% or less of a property, and you buy a residential property within three years, you don’t have to pay the extra 5% stamp duty.
If your name is going to be on the deeds, and you own another property, then the 5% extra stamp duty applies. But, there are a few ways you can avoid it:
Unfortunately, if anyone buying a property owns another then the stamp duty for second homes rate will be due. Unless they are replacing their main residence.
You could avoid this is if you are not married or in a civil partnership with each other and the person who doesn’t own any other property buys in their name only. But, this could raise other problems including with your mortgage affordability and who benefits from future price rises.
Yes, it might do. Stamp duty applies to lease extensions just as it does to any other property purchase. But, the £125,000 threshold for standard stamp duty means most people don’t have to pay it.
The issue with the stamp duty for second homes rate is that it kicks in at a much lower £40,000. Pay more for the extension, and own other properties, and you’ll pay the additional stamp duty rate. However, if the lease extension is on your main residence you are exempt.
Arrange a free consultation with a leasehold extension solicitor
There are other stamp duty surcharge reliefs including:
If you sell your previous main residence within three years then you can claim a refund.
If you sold your previous main residence on 29 October 2018 or later, HMRC must have your request for a refund within 12 months of the sale of that previous main residence, or within 12 months of the filing date of the return relating to the new residence, whichever is later.
If you think you’ve paid the stamp duty for second homes rate by mistake then you can also apply for a refund.
You will need to provide all your details to HMRC including:
You can file your refund on the HMRC website and, if approved, the money should be back with you within 15 working days.
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