This article is for general information only and does not constitute tax advice.
If you own a residential property and buy another one, the second purchase attracts a 5% SDLT surcharge on top of the standard rates. This applies to BTL purchases, second homes, and holiday lets. The surcharge was increased from 3% to 5% on 31 October 2024.
Current rates with surcharge
| Band | Standard rate | Additional property rate |
|---|---|---|
| Up to £125,000 | 0% | 5% |
| £125,001 to £250,000 | 2% | 7% |
| £250,001 to £925,000 | 5% | 10% |
| £925,001 to £1,500,000 | 10% | 15% |
| Over £1,500,000 | 12% | 17% |
On a £200,000 BTL purchase: £125,000 at 5% (£6,250) plus £75,000 at 7% (£5,250) = £11,500 total.
On a £250,000 BTL purchase: £125,000 at 5% (£6,250) plus £125,000 at 7% (£8,750) = £15,000 total.
When the surcharge applies
The surcharge applies if, at the end of the day of the purchase, you own two or more residential properties. It does not matter whether the additional property is a BTL, a holiday home, or a property you inherited. If you own your main home and buy anything residential on top of it, the surcharge kicks in.
Companies pay the surcharge on every residential property purchase, regardless of how many they own. This includes SPVs with no other properties.
Non-UK residents pay an additional 2% surcharge on top of the 5%, making the total surcharge 7% on the first £125,000 band.
Exemptions
The surcharge does not apply if the property costs less than £40,000, if the property is not a dwelling (e.g., a commercial unit without residential use), or if you are replacing your main residence.
Replacing your main residence: If you buy a new main home before selling your old one, you pay the surcharge on the new purchase. If you sell the old home within 36 months, you can claim a refund of the surcharge from HMRC. The refund claim must be made within 12 months of the sale of the old home (or within 12 months of the filing date of the SDLT return, whichever is later).
This only applies to main-residence replacements. Selling a BTL property does not trigger a refund of surcharges paid on other BTL purchases.
The refund process
Claim the refund by amending your SDLT return online through HMRC's SDLT service, or by writing to the Stamp Duty Land Tax office. Processing time is typically four to eight weeks.
Keep documentation: completion statements for both the purchase and the sale, evidence that the old property was your main residence (council tax records, electoral roll, utility bills), and the original SDLT return reference number.
Sources
- GOV.UK, "Stamp Duty Land Tax: buying an additional residential property". https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property [Accessed 6 May 2026]