Higher SDLT Rates When Buying a Second Home

If you're buying a second property in England or Northern Ireland—whether it's a buy-to-let investment, a holiday home, or simply a new home before selling your current one—you'll usually pay an additional 3% on top of standard Stamp Duty Land Tax (SDLT) rates. This surcharge applies to each tax band, making purchases of additional residential properties considerably more expensive. This guide explains when the higher rates apply, when you might be exempt, and how to reclaim the surcharge if you later sell your previous home.

Who has to pay the higher rates?

The higher rates apply when you buy a residential property (or part of one) for £40,000 or more, and it won't be the only residential property worth £40,000 or more that you own anywhere in the world.

The rules don't just consider you as an individual—they also take into account your spouse or civil partner, even if they're not named on the purchase. If either of you would trigger the higher rates individually, the whole transaction is subject to the surcharge (unless you're permanently separated).

If you're buying with someone else who isn't your spouse, the rules apply to each buyer separately. If any one of you (or their spouse) has to pay the higher rates, the surcharge applies to the entire purchase.

What properties count?

When working out whether you'll own more than one property after your purchase completes, you must include:

• Your current main home, if you still own it at the end of the day you complete on your new property
• Any residential property worth £40,000 or more that you own or part-own anywhere in the world
• Properties owned on behalf of children under 18 (parents are treated as the owners, even if held through a trust)
• Properties in which you have an interest as a beneficiary of a trust

Don't count properties where someone else has a lease with more than 21 years remaining, or properties you've already sold or given away before completion day.

The higher SDLT rates from 1 April 2025

The higher rates add 3% to each band of standard SDLT:

| Property value | SDLT rate |

|---|---|

| Up to £125,000 | 5% |

| £125,001 to £250,000 | 7% |

| £250,001 to £925,000 | 10% |

| £925,001 to £1.5 million | 15% |

| Above £1.5 million | 17% |

Example: If you buy a buy-to-let property for £300,000 on 1 April 2025 while still owning your main home, your SDLT would be:

• 5% on the first £125,000 = £6,250
• 7% on the next £125,000 (up to £250,000) = £8,750
• 10% on the final £50,000 = £5,000
• Total SDLT = £20,000

If you're a non-UK resident, you'll pay an additional 2% on top of these rates, making the starting rate 7% instead of 5%.

When the higher rates don't apply

There are several situations where you won't pay the surcharge, even if you own more than one property.

Replacing your main home

If you sell or give away your previous main home before (or on the same day as) buying your new home, you won't pay the higher rates—as long as you intend to use the new property as your main home. This applies to you and anyone buying with you who meets these conditions.

Property types that don't count

Don't include:

• Properties worth less than £40,000
• Mixed-use properties (like a shop with a flat above)
• Moveable properties like caravans, houseboats or mobile homes (unless they've become permanent fixtures)
• Leasehold properties you own where the lease was granted for 7 years or less
• Properties you lease where someone else owns the lease and it has more than 21 years remaining

Transfers between spouses

If you're transferring ownership of a property to your spouse or civil partner (and no one else is involved), the higher rates don't apply.

Increasing your share in your home

If you're buying a larger share in a property you already own at least 25% of, and it's been your main home for the previous 3 years, you won't pay the higher rates. If you're extending a lease, it must have at least 21 years remaining.

Buying six or more properties

If you're buying six or more residential properties in a single transaction on or after 1 June 2024, the non-residential rates of SDLT apply automatically instead of the higher residential rates. This benefits property investors making bulk purchases.

How to claim a refund

If you pay the higher rates because you haven't yet sold your previous main home, you can reclaim the 3% surcharge—but you must sell or give away your old home within 3 years of buying your new one.

To qualify for a refund:

• You (and your spouse) must no longer own any part of your previous home
• The higher rates mustn't apply to you for any other reason

Refund deadlines

For properties sold on or after 29 October 2018, you must claim your refund within 12 months of whichever is later:

• The sale of your previous main residence
• The filing date of your SDLT return for the new property

Exceptional circumstances

If you couldn't sell your previous home within 3 years due to exceptional circumstances (such as government-imposed restrictions or actions by a public authority preventing the sale), you may still be able to claim a refund. The purchase of your new home must have been on or after 1 January 2017.

Paying and filing your SDLT return

You must send your SDLT return to HMRC within 14 days of completion (the 'effective date' of the purchase). You can pay your SDLT bill as soon as the return has been submitted.

Sources

• Higher rates of Stamp Duty Land Tax

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.