What is stamp duty for buy-to-let properties?
This guide is for buyers in England and Northern Ireland. Wales and Scotland have different rates and rules.
Key takeaways
Landlords and other second home owners (people buying additional residential properties) have been paying higher rates of stamp duty – the ‘stamp duty surcharge’ – since April 2016
The stamp duty surcharge is currently 5% (up from 3% when it was first introduced)
Landlords buying an additional property now pay stamp duty rates ranging from 5% to 17%, depending on the portion of the property purchase price
What stamp duty would I need to pay on a buy-to-let property?
Assuming you already own a property, and you are buying an additional property to let out, you will need to pay the stamp duty surcharge.
This is a 5% surcharge on top of the standard residential rates. The amount you pay will depend on the purchase price of the property and is calculated in bands.
The surcharge was introduced to make it more difficult for investors to outbid first-time buyers and push up house prices.
You should factor the stamp duty surcharge, and other tax payments, into your calculations if you decide to become a buy-to-let landlord.
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.
In Wales, the equivalent tax is called Land Transaction Tax (LTT); in Scotland, it is Land and Buildings Transaction Tax (LBTT).
This guide focuses on stamp duty in England and Northern Ireland.
The amount of stamp duty depends on several factors, including:
the property’s purchase price
whether you’re buying your main home or an additional property
if the buyer is a first-time buyer
So how is it paid?
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. They will also submit the return to HMRC and arrange payment on your behalf.
Stamp duty applies to both freehold and leasehold properties, and also to shared ownership properties. It applies whether you’re buying outright or with a mortgage.
What is the 5% Stamp Duty Land Tax (SDLT) surcharge?
The stamp duty surcharge for second home owners (additional properties) – including landlords with buy-to-let properties – was introduced in April 2016. Initially it was a 3% surcharge on all the standard stamp duty rates. 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).
Who pays buy-to-let stamp duty rates - and when?
The buy-to-let surcharge is paid by anyone buying an additional residential property worth more than £40,000.
The following buyers will pay the higher rates:
Buy-to-let investors who already own one or more properties
Anyone buying a second home or holiday home in addition to their main residence.
The spouse (husband/wife/civil partner) of anyone who already owns a property
Couples where one person already owns a property
Stamp duty payments are due at the time of purchase. The buyer (or their solicitor) must submit the return and pay the tax within 14 days of completion in England and Northern Ireland, or 30 days in Scotland and Wales.
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 with the aim of keeping the property market moving following the Covid-19 pandemic.
The holiday meant buyers paid less stamp duty than previously.
But the stamp duty holiday has now come to an end; it ended in March 2025. Stamp duty is now payable on any property worth more than £125,000. This is known as the ‘nil-rate threshold.’
How is stamp duty calculated?
Stamp duty is calculated based on the purchase price of a property using a tiered rate system, where different portions of the property price are taxed at different rates.
This means you only pay each tax rate on the part of the property price that falls within each band – not on the full amount.
How is the stamp duty calculated for a buy-to-let purchase?
Stamp duty on a buy-to-let property is calculated using the standard residential rates plus a 5% surcharge on the entire purchase price.
Here’s how it works in England and Northern Ireland:
The property price is divided into bands
You apply the standard rate to each band
(known as the ‘slice system’)
You then add 5% to each band’s rate.
This means the 5% surcharge is not charged as a flat 5% on the entire purchase price. Instead, the higher rate is applied to each ‘slice’ of the property price.
What are the current stamp duty rates for buy-to-let in England and Northern Ireland?
The following table shows current stamp duty rates for buy-to-let landlords in England and Northern Ireland.
House Price | Stamp duty rate for landlords |
|---|---|
Up to £125,000 | 5% |
The portion from £125,001 to £250,000 | 7% |
The portion from £250,001 to £925,000 | 10% |
The portion from £925,001 to £1.5 million | 15% |
The portion above £1.5 million | 17% |
📌 Here’s an example:
A landlord with multiple properties buys a house for £400,000. The SDLT owed would be calculated as follows:
5% on the first £125,000 = £6,250
7% on the second £125,000 = £8,750
10% on the final £150,000 = £15,000
total SDLT = £30,000
How much stamp duty do landlords pay?
The following table shows how much stamp duty landlords pay compared to owner-occupiers with just one property.
House price | Standard Rate | Buy-to-let/second home rate |
|---|---|---|
Up to £125,000 | 0% | 5% |
The next £125,000 (the portion from £125,001 to £250,000) | 2% | 7% |
The next £675,000 (the portion from £250,001 to £925,000) | 5% | 10% |
The next £575,000 (the portion from £925,001 to £1.5 million) | 10% | 15% |
The remaining amount (the portion above £1.5 million) | 12% | 17% |
📌 So, an owner-occupier with just one property would pay the following stamp duty on a £400,000 purchase:
0% on the first £125,000 = £0
2% on the second £125,000 = £2,500
5% on the final £150,000 = £7,500
total SDLT = £10,000
First-time buyers pay less stamp duty than other owner occupiers. Since 1 April 2025, first-time buyers in England and Northern Ireland have paid no stamp duty on the first £300,000 of a property’s purchase price, 5% on the portion between £300,001 and £500,000, and standard rates on properties over £500,000.
You can use the MoneySupermarket stamp duty calculator to find out how much stamp duty you will need to pay as a buy-to-let landlord.
What are the stamp duty regimes in Scotland and Wales?
Stamp duty is a devolved tax in the UK, meaning Scotland and Wales set and collect their own versions instead of it using the same rates as England (and Northern Ireland).
In Scotland, it’s called the Land and Buildings Transaction Tax (LBTT), and in Wales, it’s the Land Transaction Tax (LTT). Both are administered by their respective national tax authorities and have different rate bands and surcharges from England and Northern Ireland.
What is the stamp duty regime in Scotland?
Land and Buildings Transaction Tax (LBTT) is the Scottish equivalent of stamp duty.
Buy-to-let or second homes pay the normal LBTT plus an 8% Additional Dwelling Supplement (ADS) on the purchase price.
The ADS was previously 6% but it increased to 8% on 5 December 2024. As with stamp duty in England and Northern Ireland, a slice system means you pay a different amount of tax on different portions of the purchase price.
This table shows the standard rates and ADS rates in Scotland:
Property price | Standard LBTT rate | Rates including ADS |
|---|---|---|
Up to £145,000 | 0% | 8% |
Portion from £145,001 – £250,000 | 2% | 10% |
Portion from £250,001 – £325,000 | 5% | 13% |
Portion from £325,001 – £750,000 | 10% | 18% |
Portion from over £750,000 | 12% | 20% |
What is the stamp duty regime in Wales?
Land Transaction Tax (LTT) is the Welsh version of stamp duty. It is administered by the Welsh Revenue Authority. It applies to both residential and non-residential property purchases.
Landlords and second home owners in Wales pay a surcharge in the form of higher residential rates.
This table shows the higher residential rates in Wales:
Portion of the property price | Higher LTT rate |
|---|---|
£0 - £180,000 | 5% |
£180,001 - £250,000 | 8.5% |
£250,001 - £400,000 | 10% |
£400,001 - £750,000 | 12.5% |
£750,001 - £1.5m | 15% |
£1.5m+ | 17% |
How and when must you pay stamp duty?
Stamp duty is paid after completion of the property purchase – that’s the date the transaction legally finalises and you get the keys.
You or your conveyancer must submit a return and pay within:
14 days of the completion date in England and Northern Ireland
30 days of the completion date in Scotland and Wales
Solicitors usually handle the return and payment automatically on your behalf when the purchase completes.
Why do landlords pay more stamp duty?
Landlords pay higher rates of stamp duty due to a policy aimed at discouraging speculative property investment with a buy-to-let mortgage. The policy is intended to support home ownership and make it easier for first-time buyers to get on the property ladder.
A Conservative Government back in 2016 introduced a higher stamp duty surcharge for additional properties, such as investment property and second homes, to address these concerns.
The Labour Government has continued the policy, increasing the surcharge from 3% to 5% in October 2024.
The impact of this surcharge is substantial, potentially adding thousands of pounds to the upfront cost of buing a property 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, such as a second home or holiday home.
If you inherit a property (or part of a property), you may have to pay the stamp duty surcharge if you buy your main home while you still own the inherited property. As the rules can be more complicated, it’s important to seek advice from a tax adviser.
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 may apply. Once again, it may be worth seeking advice.
Where couples buy a property together, if one person already owns a property and purchases a second home with their partner, the surcharge may apply.
For stamp duty purposes, married couples are classed as a single unit. So, if you are married and one of you owns a home, any new home purchased by either of you (or both) will generally be subject to the higher rate surcharge.
Frequently asked questions
Does the stamp duty surcharge apply if I own a property overseas?
Yes – the stamp duty surcharge applies even if the other property you own is outside the UK.
HMRC treats any residential property worldwide as ownership when deciding if the stamp duty surcharge applies. So, if you already own a home abroad and then buy a property in the UK, you’ll usually pay the surcharge because you’re considered to own more than one property.
If my spouse already owns a property, do I have to pay the stamp duty surcharge?
Yes. Married couples and civil partners are treated as a single entity for stamp duty purposes. If one partner already owns a property and the couple purchases another, the higher rate SDLT applies, even if the second property is registered under the non-owner’s name.
This rule aims to prevent couples from splitting ownership to avoid the surcharge.
Cohabiting couples will pay the surcharge if one person owns a property and then they buy one together. But if one person owns a property in their sole name, the other can buy a property registered under their own name without paying the surcharge.
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.
If you’re considering buying property through a limited company, it’s worth taking professional tax advice before proceeding.
Are there any exemptions from the 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 [in England Northern Ireland] bought by non-UK residents. The surcharge will apply to purchases of both freehold and leasehold property.
For stamp duty purposes, someone is generally treated as ‘non-UK resident’ if they have not been present in the UK for at least 183 days 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?
In some circumstances, a property that is not suitable for use as a dwelling at the time of purchase may be treated as ‘non-residential’ for stamp duty purposes.
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.
Can I get a stamp duty surcharge refund if I sell my other property?
You might be eligible for a stamp duty surcharge refund if you:
Paid the higher rate because you owned another property when you bought your new home, but later sold your previous main residence.
The sale happens within 36 months of buying the new property.
To claim the refund you will need to submit an SDLT refund claim to HMRC (usually through the Gov.uk website.)
You must claim within 12 months of selling your old home or within 12 months of the SDLT filing date – whichever is later.
Refunds typically apply only to main residence replacements, not to buy-to-let investments that remain as additional properties.
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Esther Shaw
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Esther Shaw is an award-winning consumer, financial and property journalist with more than two decades of experience. As a freelance writer, she regularly contributes to a range of national titles...
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