Second Home Stamp Duty Calculator

SDLT Rates for Additional Properties 2025/26

Note: First-time buyers get 0% on first £425,000 (properties up to £625,000). The 5% surcharge applies to the entire purchase price, not just amounts over thresholds.

When Does the 5% Surcharge Apply?

You WILL pay the surcharge if:

• You already own a residential property (or share worth £40,000+) anywhere in the world
• Buying a buy-to-let or investment property
• Buying a second home or holiday home
• You're married/civil partnered and your spouse owns property
• Buying before selling your current home (temporary ownership of 2 properties)

You WON'T pay the surcharge if:

• You're a genuine first-time buyer
• You're replacing your only or main residence (and sell within 36 months)
• The additional property costs less than £40,000
• You're buying a caravan, mobile home, or houseboat
• Buying property for a child who doesn't own property (if they'll live there)

Claiming a Refund of the Surcharge

You can reclaim the 5% surcharge if:

1. You buy a new main residence
2. You paid the surcharge because you still owned your previous main home
3. You sell your previous main home within 36 months of buying the new one
4. You apply for the refund within 12 months of selling

How to Claim

• Complete an SDLT return amendment (form SDLT1)
• Include proof of sale of previous main residence
• Submit within 12 months of selling the old property (or 12 months after the filing date if later)
• HMRC aim to process refunds within 15 working days

Married Couples and the Surcharge

Married couples and civil partners are treated as a single unit for SDLT purposes:

• If either spouse owns property anywhere in the world, both are treated as property owners
• This applies even if only one spouse is named on the new purchase
• It applies even if the existing property is solely owned by the other spouse
• The only exception is if you're permanently separated (living apart under court order or deed)

Companies and the Surcharge

Companies buying residential property face additional considerations:

• Companies always pay the 5% surcharge on residential purchases
• Properties over £500,000 may attract the 15% flat rate (ATED-related SDLT)
• Annual Tax on Enveloped Dwellings (ATED) may also apply
• Property development and rental business exceptions may apply

Strategic Considerations for Additional Property Purchases in 2025/26

The increase in the additional property surcharge from 3% to 5% in October 2024 has significantly changed the economics of buying second homes and buy-to-let properties in England and Northern Ireland. Understanding the full financial picture is essential before committing to a purchase.

The True Cost of the 5% Surcharge

The surcharge is calculated on the entire purchase price, not just the amount above a threshold. This means it adds a substantial upfront cost to any additional property purchase:

• On a £200,000 property: the surcharge alone is £10,000, bringing total SDLT to £10,000 (compared to £0 for a main residence)
• On a £350,000 property: the surcharge is £17,500, bringing total SDLT to £22,500
• On a £500,000 property: the surcharge is £25,000, bringing total SDLT to £37,500

For buy-to-let investors, this additional stamp duty must be factored into your yield calculations. A property yielding 5% gross rental return effectively loses its first year of rental income to stamp duty alone on many price points.

Tax Implications Beyond Stamp Duty

Additional property ownership in the UK carries several ongoing tax obligations that buyers should understand before purchasing:

• Income Tax on rental income -- All rental profit is taxed at your marginal rate (20%, 40%, or 45%). Since the Section 24 mortgage interest restriction took full effect in April 2020, landlords can only claim a 20% tax credit on mortgage interest, not a full deduction. This particularly affects higher-rate taxpayers.
• Capital Gains Tax on sale -- When you sell an additional property, CGT applies at 18% (basic rate) or 24% (higher rate) on the gain. The annual CGT exemption for 2025/26 is just £3,000, down from £12,300 in 2022/23.
• Council Tax -- You must pay Council Tax on second homes. Many local authorities in England now charge a premium of up to 100% on second homes that are not occupied as a main residence.

Timing Your Purchase: What to Consider

If you are replacing your main residence, careful timing can save thousands in stamp duty. The key rules to remember:

1. If you buy a new main home before selling your old one, you will pay the 5% surcharge upfront
2. You can claim a full refund of the surcharge if you sell your previous main home within 36 months
3. The refund application must be submitted within 12 months of the sale date
4. HMRC typically processes refunds within 15 working days of receiving a valid application

For the latest guidance, check GOV.UK SDLT residential rates.

Scotland and Wales

This calculator covers England and Northern Ireland. Scotland and Wales have their own systems:

Scotland (LBTT)

• Land and Buildings Transaction Tax applies
• Additional Dwelling Supplement (ADS) is 6% from December 2022
• Different rate bands apply

Wales (LTT)

• Land Transaction Tax applies
• Higher rates for additional properties
• Different thresholds and rates