Stamp duty on a second home: the 5% surcharge, price by price
The short answer: if you buy a second home or a buy-to-let in England or Northern Ireland, you pay the normal stamp duty rates plus 5% of the whole price. The surcharge is added to every band, including the slice that’s normally tax-free. On a £300,000 property that means £20,000 instead of £5,000. It applies to holiday homes and let properties alike, and it rose from 3% to 5% for purchases from 31 October 2024.
The rates on a second home
Take the standard residential rates and add 5% to each. The surcharge applies to the portion of the price in each band:
| Part of the price | Standard rate | Second home rate |
|---|---|---|
| £0 to £125,000 | 0% | 5% |
| £125,000 to £250,000 | 2% | 7% |
| £250,000 to £925,000 | 5% | 10% |
| £925,000 to £1,500,000 | 10% | 15% |
| Over £1,500,000 | 12% | 17% |
Because 5% is added to every band, the extra cost is simple: 5% of the purchase price, whatever that price is, as long as it’s £40,000 or more. A £500,000 buy-to-let costs £25,000 more than the same property would cost a home mover.
Price by price
| Price | Buying your only home | Second home or buy-to-let | Extra |
|---|---|---|---|
| £150,000 | £500 | £8,000 | £7,500 |
| £200,000 | £1,500 | £11,500 | £10,000 |
| £250,000 | £2,500 | £15,000 | £12,500 |
| £300,000 | £5,000 | £20,000 | £15,000 |
| £400,000 | £10,000 | £30,000 | £20,000 |
| £500,000 | £15,000 | £40,000 | £25,000 |
| £750,000 | £27,500 | £65,000 | £37,500 |
| £1,000,000 | £43,750 | £93,750 | £50,000 |
Who has to pay the higher rates
You pay them if, at the end of the day you complete, you own two or more residential properties and the one you’re buying isn’t replacing your main home. A few details catch people out:
- It doesn’t matter what you use it for. A holiday home you never let out is still a second home. So is a flat you inherited a share of in some cases, a home abroad you already own, or a property bought with a partner who owns another.
- Couples are treated together. If you’re married or in a civil partnership and buying jointly, the higher rates generally apply if either of you owns another home.
- Minimum price. Purchases under £40,000 aren’t caught.
- Companies pay differently. Buying through a company can bring other charges, so get advice before you do.
- The old six-or-more-homes option has gone. The relief called multiple dwellings relief was abolished from 1 June 2024.
Replacing your main home: how to get it back
If you buy a new main home before you’ve sold your old one, you’ll pay the higher rates on completion, because you own two homes at that moment. You can claim the extra back if you sell the old home within three years of buying the new one. The claim goes to HMRC and normally has to be made within 12 months of the sale. Plan your cash flow for this: you need the extra sum up front, and may wait months to get it back.
Extra for non-UK residents
Buyers who aren’t UK resident for tax purposes pay another 2% on top of everything else. Combined with the second home surcharge, that’s 7% added to every band. It’s worth checking your residency before you exchange, because the test isn’t the same as for income tax.
When you pay and what else to budget
Stamp duty has to be filed and paid within 14 days of completion, usually by your solicitor out of the money you send them. Beyond stamp duty, a buy-to-let comes with legal fees, a larger deposit (lenders often ask for 25%), possible capital gains tax on a later sale, and income tax on the rent. See the rental yield calculator for how the running costs affect your return, and our price-by-price stamp duty table if you’re also comparing against a standard purchase.
Can you avoid it or reduce it?
Honest answer: not by clever structuring for most people, but there are legitimate situations where the surcharge does not apply or is refunded.
- Replacing your main home. If you buy a new main residence before selling the old one, you pay the surcharge at first but can claim it back if the old home is sold within three years. You usually have to claim within 12 months of the sale.
- Properties under £40,000. The surcharge does not apply to a purchase below that price.
- Inherited shares of a property. A share of 50% or less in a property you inherited, if the share was bought or inherited in the last three years, may not count as owning another home.
- Working out who counts as owning what. A spouse or civil partner’s property counts. If you are permanently separated, it may not.
Be wary of anyone selling a way round it. HMRC looks at ownership on the day you complete, and mistakes are penalised.
Scotland and Wales work differently
The 5% surcharge applies in England and Northern Ireland only. In Scotland the equivalent is the Additional Dwelling Supplement, charged at 8% of the whole price on top of Land and Buildings Transaction Tax (it was raised from 6% in December 2024). Wales replaced its surcharge with a separate set of higher rates from 11 December 2024. Both nations have their own bands and reliefs, so use their own calculators rather than the figures in this guide.
Is it worth buying anyway?
The surcharge is a one-off cost, but it is large relative to the rental income it takes years to earn back. On a £300,000 property the surcharge adds £15,000 to the £5,000 a home-mover would pay. Before you commit, test whether the yield covers it using the rental yield calculator, and use the price table in stamp duty at every price to compare against a normal purchase.
This is general information, not tax advice. Rates apply in England and Northern Ireland. Scotland and Wales have their own taxes. Always check the position with your solicitor or HMRC before you complete.
Common questions
How much is stamp duty on a second home?
In England and Northern Ireland you pay the normal rates plus a 5% surcharge on every band. On a £300,000 property that is £20,000, compared with £5,000 for someone buying their only home.
Do I pay the surcharge on a buy-to-let?
Yes. The higher rates apply to any extra residential property you own at the end of the purchase day, whether you let it out, use it as a holiday home or leave it empty.
Can I get the surcharge back if I sell my old home?
Yes, if you buy a new main home before selling your old one and then sell the old one within three years. You can claim the extra back from HMRC, normally within 12 months of the sale.
Is there a minimum price for the surcharge?
Yes. It does not apply to purchases under £40,000.
Does this apply in Scotland and Wales?
No. Scotland charges Land and Buildings Transaction Tax and Wales charges Land Transaction Tax. Both have their own rates and their own higher charges for second homes.