How Much Stamp Duty Do I Pay on a Buy-To-Let Property?

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If you buy a second or additional property, you will need to pay a Stamp Duty Surcharge. Here's what you need to know:

What is Stamp Duty Land Tax (SDLT)?

Stamp Duty Land Tax (SDLT) is a tax payable to HMRC on property and land purchases. Unless you are a first-time buyer meeting certain criteria, you must pay SDLT when you buy a residential property in England or Northern Ireland for over £125,000.

In Scotland, you pay Land and Buildings Transaction Tax, and in Wales Land Transaction Tax.

Higher Stamp Duty rates for second homes and additional properties

In April 2016, the Government introduced a Stamp Duty surcharge on second or additional homes.

If you purchase a buy-to-let property, you will have to pay a 3% surcharge in addition to the standard SDLT rate.

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

How much Stamp Duty will I have to pay in a second home?

SDLT rates on second homes (including the 3% surcharge) are as follows:

Stamp Duty bracket SDLT % rate
Up to £125,000 3%
The next £125,001 - £250,000 5%
The next £250,001 - £925,000 8%
The next £925,001 - £1.5m 13%
The amount over £1.5m 15%

Use our Stamp Duty Land Tax Calculator to see how much Stamp Duty you will need to pay.

Who has to pay the Stamp Duty surcharge?

The 3% surcharge does not only affect landlords purchasing a buy to let property. Anyone buying a property in addition to their main residence will have to pay the surcharge.

The surcharge would still be payable in the following circumstances:

  • A parent buying a home for their child unless the property is to be registered in their child’s name only or in a trust.
  • A married couple who own a property in one name only then buys 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. There is no Stamp Duty surcharge on the following types of property:

  • Caravans and mobile homes
  • Houseboats
  • Property purchased for under £40,000

See also:

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

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Gaynor Haliday, Legal researcher

Author:
Gaynor Haliday, Legal researcher