How much stamp duty do I pay on a buy to let property?

If you buy a second property to be used as a buy to let, you are required to pay a stamp duty surcharge. Here is what you need to know.

Stamp duty calculator

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See also:

Can I get stamp duty relief as a first time buyer?

New rules from 2016

In April 2016, a stamp duty surcharge was introduced by the Conservative government. Anyone buying a second (or additional) home, e.g to be used a buy-to-let, now has to pay a 3% surcharge over and above the standard rate of stamp duty.

The surcharge applies to any property purchased in England, Wales or Northern Ireland that is not the buyer’s main residence.

Stamp duty rates on buy to let properties and second homes  

Stamp duty bracket Buy-to-let/second home rate (1st April 2016)
 Up to £125,000 3%
 £125,001 - £250,000 5%
 £250,001 - £925,000 8%%
 £925,001 - £1.5m 13%
over £1.5m 15%

Who else might these changes affect?

The 3% surcharge does not only affect landlords purchasing a buy to let property, but anyone buying a property in addition to their main residence.

The surcharge is applicable even in the following cases:

  • A parent buying a home for their child, unless the property is to be registered in their child’s name only.
  • A married couple who own a property in one name only, then buy a second property in the other spouse’s name.
  • Anyone who owns a property abroad, who subsequently buys a home in England, Wales or Northern Ireland.  
  • If you are selling your home: buying a second property before the first has sold. The additional stamp duty you paid while owning two properties can be claimed back if you sell your original home within three years.

Are any properties exempt?

Yes, the following properties are exempt from any stamp duty tax:

  • Caravans and mobile homes
  • Houseboats
  • Any property purchased for less than £40,000

It is also worth noting that properties purchased for less than £40,000 are not taken into account when an additional property is bought.

Gaynor Haliday, Legal researcher

About the author

Gaynor Haliday is an experienced legal researcher and published author. She has had numerous articles published in the press and is a legal industry commentator.

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