If you already own a home and buy another one for £40,000 or more, you usually pay an extra 5% of the whole price in England and Northern Ireland, on top of normal Stamp Duty Land Tax. Scotland charges an 8% Additional Dwelling Supplement, and Wales uses a separate set of higher residential rates. On a £300,000 second home in England that means £20,000 of tax instead of £5,000.
Note: this is general information, not tax or legal advice. Stamp duty rules have exceptions and the figures here are estimates for 2026/27. Check GOV.UK, Revenue Scotland or the Welsh Revenue Authority, and ask your solicitor to confirm the tax before you exchange contracts.
What counts as an additional home
The higher rates apply when you buy a residential property and, at the end of the day of completion, you own more than one dwelling. They are aimed at second homes, holiday lets and buy-to-let purchases, but the test is about ownership, not intention. The usual situations are:
- You keep your current home and buy a second one to live in part of the week.
- You buy a flat to let out while you rent or own somewhere else.
- You buy a holiday cottage while still living in your main home.
- You inherit a share in a property and then buy a home without selling the inherited share, which can catch people out. Check the specific rules on GOV.UK because a minority interest sometimes does not count.
- You buy a home before selling your old one, even when you fully intend to sell. At completion you own two, so the surcharge applies at first.
The price threshold is £40,000. Below that the surcharge is not charged, and above it the surcharge applies to the entire price, not just the part over £40,000. The surcharge is therefore a cliff edge: a property at £39,000 attracts no surcharge, while one at £40,000 attracts £2,000 in England.
A married couple or civil partners are generally treated together for this test, so one spouse owning a home can make the other spouse’s purchase an additional one. The rules for people buying with someone else, for children owning property, and for trusts are detailed, which is why a solicitor’s check matters.
How the 5% surcharge works in England and Northern Ireland
The calculation is in two parts. First you work out the standard residential SDLT, which is 0% up to £125,000, 2% from £125,001 to £250,000, 5% from £250,001 to £925,000, 10% from £925,001 to £1.5 million and 12% above that. Second, you add 5% of the full purchase price. For a non-UK resident there is a further 2% on top.
Here are worked examples from the House of Calculator engine for an additional property in England:
| Price | Standard SDLT | 5% surcharge | Total | Effective rate |
|---|---|---|---|---|
| £150,000 | £500 | £7,500 | £8,000 | 5.33% |
| £250,000 | £2,500 | £12,500 | £15,000 | 6.00% |
| £300,000 | £5,000 | £15,000 | £20,000 | 6.67% |
| £400,000 | £10,000 | £20,000 | £30,000 | 7.50% |
| £500,000 | £15,000 | £25,000 | £40,000 | 8.00% |
| £750,000 | £27,500 | £37,500 | £65,000 | 8.67% |
Take the £300,000 case. The standard tax is 2% of the £125,000 band from £125,001 to £250,000, which is £2,500, plus 5% of the £50,000 above £250,000, which is £2,500. That makes £5,000. The surcharge is 5% × £300,000 = £15,000. The total is £20,000, so the second home costs four times as much in stamp duty as the same property bought as a main home.
If the buyer is also not UK resident, a further 2% applies, which on £300,000 is £6,000, and the total becomes £26,000. Check GOV.UK for how residence is tested, because it depends on days spent in the UK.
Scotland: the Additional Dwelling Supplement
Scotland uses Land and Buildings Transaction Tax (LBTT) instead of SDLT. The standard bands are 0% to £145,000, 2% to £250,000, 5% to £325,000, 10% to £750,000 and 12% above. On top, the Additional Dwelling Supplement (ADS) is 8% of the price for additional homes costing £40,000 or more.
| Price | Standard LBTT | 8% ADS | Total | Effective rate |
|---|---|---|---|---|
| £150,000 | £100 | £12,000 | £12,100 | 8.07% |
| £250,000 | £2,100 | £20,000 | £22,100 | 8.84% |
| £300,000 | £4,600 | £24,000 | £28,600 | 9.53% |
| £400,000 | £13,350 | £32,000 | £45,350 | 11.34% |
| £500,000 | £23,350 | £40,000 | £63,350 | 12.67% |
The difference from England is large at low prices. On a £150,000 flat the England surcharge is £7,500 while the Scottish one is £12,000. As the price rises the standard-tax part matters more. At £300,000 the Scottish total of £28,600 is £8,600 more than the English £20,000, almost entirely because of the higher supplement. Check Revenue Scotland for the current supplement rate and for the rules on repaying it if you sell your previous main residence within a set period.
Wales: higher residential rates
Wales has Land Transaction Tax (LTT). The main residential rates start at 0% to £225,000, then 6% to £400,000, 7.5% to £750,000, 10% to £1.5 million and 12% above. For additional homes, Wales does not apply a flat surcharge. It uses a separate higher rate table. The calculator applies those higher rates, and for the same additional homes it gives:
| Price | LTT on an additional home | Effective rate |
|---|---|---|
| £150,000 | £7,500 | 5.00% |
| £250,000 | £14,950 | 5.98% |
| £300,000 | £19,950 | 6.65% |
| £400,000 | £29,950 | 7.49% |
| £500,000 | £42,450 | 8.49% |
These are close to the English totals at the mid-range. Wales has no first-time buyer relief, so the comparison for a first purchase is different. Confirm the exact higher-rate bands on the Welsh Revenue Authority website before relying on a figure, because the calculator’s note says to check with your solicitor.
Replacing your main home: when you can get the surcharge back
The surcharge is usually paid even when you plan to sell your old home. If you are buying a new main home before you have sold the old one, you pay the surcharge at completion. In England, if you then sell your previous main residence within a time limit after buying, you can usually apply to HMRC for a refund of the surcharge. The limit has been three years for England, but check GOV.UK because it is the kind of detail that changes.
That has a real cash-flow effect. Suppose you buy a £400,000 home before selling your old one. You pay £30,000 rather than £10,000 at completion, so you need an extra £20,000 on the day. If the old home sells within the time limit, you reclaim the £20,000 later. If the chain breaks and it does not sell, the money is lost. Bridging finance or a solicitor’s advice may be worth discussing in that case. A similar refund route exists in Scotland for the Additional Dwelling Supplement, with its own time limit, so check Revenue Scotland.
How the extra tax changes the numbers for a landlord
For a buy-to-let purchase the surcharge is a real cost. It is not deductible against rental income, but it can be added to the cost of the property when you work out a capital gain on a later sale. That makes it relevant to Capital gains tax explained: rates, allowance and how to work it out, because a higher base cost reduces the taxable gain. The rules on what counts as an allowable cost can be detailed, so check GOV.UK.
It also lowers your yield on cost. Consider a £250,000 flat in England let at £1,200 a month. The rent is £14,400 a year, so the gross yield on the price is 5.76%. The stamp duty is £15,000, which is 6% of the price. If you count it as part of your investment, the yield on total cost falls to £14,400 ÷ £265,000 = 5.43%. Buy-to-let yield explained sets out how yield is worked out. The extra tax also takes months of rent to recover: £15,000 is 12.5 months of gross rent at £1,200 a month.
Ways people reduce or avoid the surcharge, and what to watch
Not every purchase attracts the higher rate, and some are exempt. These are the main things to ask about, rather than assuming they apply:
- Replacing your only or main home. If you own just one home and you are replacing it, the surcharge does not apply when you complete the purchase and the sale on the same day. A timing gap triggers it, which is why solicitors often coordinate completions.
- Six or more dwellings in a single transaction. Buyers of six or more homes in one deal can sometimes elect to use the non-residential rates instead. This is specialised and needs professional advice.
- Mixed-use property. A shop with a flat above is treated differently from a house. Check GOV.UK.
- Company purchases. Companies buying residential property above £40,000 usually pay the higher rates, and in some cases a still higher rate applies. This is not a simple route to saving tax.
Deliberately splitting ownership between family members to avoid the surcharge can fail, because rules treat spouses together and some arrangements are caught by anti-avoidance provisions. Take advice before arranging a purchase to get a particular result.
Paying and filing
In England and Northern Ireland an SDLT return is normally due within 14 days of completion, and your solicitor usually files it and pays the tax from the funds you send. Late filing brings penalties and interest. Scotland and Wales have their own returns and deadlines. When you budget for a second home, add the stamp duty to your list with the legal fees, survey and any lender costs. The First-time buyer costs: the full checklist lists those other costs, and many apply to a second home too.
Try the calculator
Enter the price, location and buyer type in the Stamp Duty Calculator and choose “Buying an additional property” to see the tax and surcharge side by side. Then compare it with the figure from your solicitor.
Frequently asked questions
How much is the stamp duty surcharge on a second home?
In England and Northern Ireland it is 5% of the whole price for a second home of £40,000 or more, added to the standard SDLT. In Scotland the Additional Dwelling Supplement is 8%. Wales uses higher residential rates instead.
Do I pay the higher rate if I buy before selling my old home?
Usually yes at completion, because you own two homes at the end of the day. In England you can often claim the surcharge back if you sell your previous main home within the time limit, which has been three years. Check the deadline on GOV.UK.
Is the surcharge charged on the whole price or just the part above £40,000?
On the whole price. A £40,000 property in England pays £2,000, while a £39,000 one pays nothing. That makes the threshold a sharp cut-off rather than an allowance.
Do I pay stamp duty on a second home if I am a first-time buyer?
First-time buyer relief applies only if you are buying your first and only home. If you already own a property anywhere in the world, you do not qualify, and the additional property rules apply instead.
Can I deduct the stamp duty from my rental income?
No. Stamp duty on a buy-to-let is a capital cost, not a deduction from rent. It may be added to the property’s cost when you later work out capital gains, so keep your completion statement.