Buy-to-let stamp duty

This guide is about the stamp duty regime in England and Northern Ireland. There are different systems in Scotland (Land and Buildings Transaction Tax) and Wales (Land Transaction Tax). 

Key takeaways 

• Landlords and other second home owners have been paying higher rates of stamp duty since April 2016 

• From 31 October 2024 the stamp duty surcharge, paid on second home purchases in England and Northern Ireland, went up from 3% to 5%.  

• Landlords now pay stamp duty rates from 5% to 17% of the property purchase price 

What is stamp duty? 

Stamp Duty Land Tax (SDLT) is a mandatory tax that is applied when purchasing a property or land in England and Northern Ireland. 

The amount of stamp duty depends on several factors, including the price of the property, whether it’s a primary residence or a second home, and if the buyer is a first-time homebuyer. 

Stamp duty is generally paid within 14 days of completing the property purchase. If you're taking out a mortgage, your solicitor will typically handle the stamp duty payment for you. 

What is the 5% Stamp Duty Land Tax (SDLT) surcharge? 

The stamp duty surcharge for second home owners – including landlords – was introduced in April 2016. Initially it was a 3% surcharge on all stamp duty bands. The stamp duty surcharge was upped from 3% to 5% from 31 October 2024. 

The stamp duty surcharge means you pay more stamp duty on second homes, or additional homes beyond that, than you would if you only own one property. HMRC calls it the 'Higher Rates on Additional Dwellings' (HRAD).

What was the stamp duty holiday ? 

From September 2022 to 31 March 2025, home buyers in England and Northern Ireland benefited from a stamp duty holiday. This was introduced by the government to keeping the property market moving following the Covid-19 pandemic. The holiday meant all buyers paid less stamp duty than previously. 

But the stamp duty holiday has now come to an end. Stamp duty is now payable on any property worth more than £125,000. 

How much stamp duty do landlords pay? 

The following table shows current stamp duty rates for both owner-occupiers and second home owners, including buy-to-let landlords. 

You can use the MoneySupermarket stamp duty calculator to find out how much stamp duty you will need to pay as a landlord. 

Why do landlords pay more stamp duty? 

Landlords pay higher rates of stamp duty due to a policy aimed at discouraging speculative property investment and helping first-time buyers get on the property ladder.  

The previous Conservative Government introduced a higher stamp duty surcharge for additional properties, such as buy-to-let homes and second homes, to address these concerns. The current Labour Government has continued the policy. 

The impact of this surcharge is substantial, potentially adding thousands of pounds to a property investor's initial costs. Landlords need to factor in stamp duty charges when working out the profitability of a particular property. 

Who pays the stamp duty surcharge?  

The additional stamp duty is not limited to landlords and property investors. The surcharge applies to anyone purchasing an additional residential property. This means that buyers need to be aware of the rules to avoid unexpected costs.  

If a new property is acquired before the sale of the main residence, the higher stamp duty rate must be paid upfront. However, a refund can be issued if the main residence is sold within a 36-month window.  

Parents intending to buy homes for/with their children also need to consider the stamp duty surcharge if they are already homeowners. If the property is not solely in the child's name, the surcharge will apply. 

Where couples buy a property together, if one person already owns a property and purchases a second home with their partner, the surcharge will apply. 

Do limited companies have to pay the stamp duty surcharge?

Some landlords might consider establishing a limited company for their property business in an attempt to avoid the stamp duty surcharge. 

However, the rules are clear: both individuals and companies are liable for the additional stamp duty when purchasing residential properties.  

Are any second properties  exempt from stamp duty surcharge?

Yes. Caravans, mobile homes, houseboats, and residential properties valued under £40,000 are exempt. 

How much stamp duty do overseas landlords have to pay?

An extra 2% stamp duty surcharge applies to properties bought by non-UK residents. The surcharge will apply to purchases of both freehold and leasehold property.  

Non-UK residents are defined as individuals who have spent fewer than 183 days in the country during the 12 months preceding the purchase. However, if they stay in the UK for at least 183 days following the purchase, they may qualify for a refund of the surcharge.  

This surcharge is not exclusive to foreign nationals; it also applies to UK citizens who do not meet the residency requirement. In joint purchases, if at least one buyer is a non-UK resident, the surcharge is triggered.  

What are landlord stamp duty rebates?

A legal precedent has established that if a property is deemed uninhabitable at the time of completion, it may not be classified as a dwelling for the purposes of stamp duty.  

Landlords who take on a mortgage for a property that is uninhabitable at the time of purchase should seek legal advice, as they may be eligible for a stamp duty refund.