Stamp duty on a second home

If you’re buying a second home that you won’t be living in, you’ll be charged an additional rate of stamp duty. The amount you pay depends on the property value and where you live in the UK. We explain the rules for second homes and look at cases where you may not have to pay stamp duty.

If you’re buying a second home that you won’t be living in, you’ll be charged an additional rate of stamp duty. The amount you pay depends on the property value and where you live in the UK. We explain the rules for second homes and look at cases where you may not have to pay stamp duty.

Alex Hasty
Insurance and finance expert
4
minute read
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Last Updated 28 SEPTEMBER 2022

Who has to pay stamp duty on a second home? 

With a few exceptions, anyone buying an additional residential property has to pay stamp duty. On second homes bought in England and Northern Ireland, there’s a 3% surcharge on top of the basic stamp duty rate, while similar rules apply in Scotland and Wales (see below). The surcharge applies to any of the following: 

  • A holiday home 
  • A buy-to-let property 
  • A home you own a share in, if your share is worth £40,000 or more 
  • A property you buy in the UK, if your main home is abroad 
  • A second home bought via a limited company 

How much is stamp duty on a second home? 

Second-property stamp duty rates are the same in England and Northern Ireland, but different if you’re buying a property in Scotland or Wales. You can find out more details by using our stamp duty calculator for guidance, which shows the split across each region.

England and Northern Ireland

The stamp duty thresholds were raised in the September 2022 mini-budget. Stamp duty for second homes from 23 September is shown in the table below: 

Property value Standard stamp duty rate Additional property stamp duty rate
Up to £250,000 0% 3%
£250,001 – £925,000 5% 8%
£925,001 – £1.5m   10% 13%
Over £1.5m 12% 15%

Scotland 

Buyers of second homes in Scotland have to pay the ‘Additional Dwelling Supplement’ on top of the Land and Buildings Transaction Tax (LBTT). This is 4% on the purchase price of properties over £40,000.

Property value Land and Buildings Transaction Tax rate   Additional Dwelling Supplement  
Up to £145,000   0% 4% of purchase price of property
£145,001 – £250,000   2%
£250,001 – £325,000  5%
£325,001 – £750,000  10%
Over £750,000   12%

Wales 

Buyers of second homes in Wales have to pay the higher residential rate of Land Transaction Tax (LTT) for properties over £40,000.

Property value Standard LTT rate Higher residential rate
Up to £180,000  0% 4%
£180,001 – £250,000   3.5% 7.5%
£250,001 – £400,000   5% 9%
£400,001 – £750,000  7.5% 11.5%
£750,001 – £1.5m   10% 14%
£1.5m+   12% 16%

Are any homes exempt from stamp duty for second homes?

There are exceptions but, typically, you’ll have to pay the tax on most second properties. But you won’t have to pay the additional stamp duty rate on: 

  • Caravans, mobile homes or houseboats irrespective of how much you pay for them 
  • A home you’re going to live in, provided you’ve sold your existing property (more about this below…) 

What if the home I’m buying will be my main residence? 

If you’re intending to replace your main residence with the property you’re purchasing, you won’t have to pay the additional stamp-duty rate. But you must have sold your existing home to qualify for this exemption. 

If you haven’t sold your previous main residence by the day of completion on your new home, you’ll have to pay the second property tax. That’s because you now own two properties. 

But the good news is that you can apply for a second-home stamp-duty refund if you sell your previous main home within 36 months. 

What if my partner already owns a home. Will I have to pay stamp duty?

The rules apply to both you and anyone you’re buying with. So if your partner already owns a home and they’re keeping it, then you’ll have to pay the higher rates if you buy another house together.

In what circumstances might stamp duty not be payable on a second home? 

There are some situations in which stamp duty on a second home in the UK might not apply, although you should always be careful not to break the rules. 

  • Stamp duty is not normally payable on properties that are inherited, although inheritance tax may still apply. You’ll have to pay additional stamp duty if you buy another residential property 
  • You’re exempt if the property has been transferred following a divorce or separation after the end of a civil partnership 
  • If you’re buying a home for your children, you can gift the deposit. As long as you’re not the joint owner of the property, the second-home stamp-duty surcharge won’t apply 
  • Guarantors for a mortgage are not classed as property owners so will avoid the additional rate

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