Since 1 April 2016, you might have to fork out an extra 3% in Stamp Duty Land Tax if you’re buying an additional home.
There are a number of determining factors for a house to be classed as a second residence: but it is essentially anything other than your main residence. It could be a holiday let, a property bought as an investment or somewhere you are helping another family member to buy.
HMRC stamp duty was abolished for the first time buyers on properties up to £300,000.
First-time buyers of homes worth between £300,000 and £500,000 will not pay stamp duty on the first £300,000 but will pay the normal rates of stamp duty on the price above that.
If you are a first-time buyer and you are purchasing a property for more than £500,000, then you will not be entitled to the discounted rates.
How much is Stamp Duty on a second home?
You’ll usually have to pay 3% on top of the normal SDLT rates if buying a new residential property means you’ll own more than one.
You won’t pay the extra 3% SDLT if the property you’re buying is replacing your main residence and that has already been sold (It isn’t a second home).
If there’s a delay selling your main residence and it hasn’t been sold on the day you complete your new purchase:
- you’ll have to pay higher rates because you own 2 properties
- you may be able to get a refund if you sell your previous main home within 36 months
Stamp Duty Tax Calculator on Second Homes
| Calculate |
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Results | |
Stamp duty to pay Effective rate |
Tax Band | % | Taxable Sum | Tax |
£0 – £125,000£0 – £125k | |||
£125,000 – £250,000£125k – £250k | |||
£250,000 – £300,000£250k – £300k | |||
£300,000 – £925,000£300k – £925k | |||
£925,000 – £1,500,000£925k – £1.5m | |||
£1,500,000+£1.5mill+ |
Stamp Duty Tax Rates on Second Homes as of November 2017
Tax Band | First time buyer rate | Standard rate | Buy-to-let/ Second home rate |
£0 – £125,000£0 – £125k | 0% | 0% | 3% |
£125,001 – £250,000£125k – £250k | 0% | 2% | 5% |
£250,001 – £300,000£250k – £300k | 0% | 5% | 8% |
£300,001 – £925,000£300k – £925k | 5% | 5% | 8% |
£925,001 – £1,500,000£925k – £1.5m | 10% | 10% | 13% |
£1,500,000+£1.5mill+ | 12% | 12% | 15% |
When do you have to pay Stamp Duty?
You must send an SDLT return to HMRC and pay the tax within 30 days of completion. If you have a solicitor, agent or conveyancer, they’ll usually file your return and pay the tax on your behalf on the day of completion and add the amount to their fees. They’ll also claim any relief you’re eligible for, such as if you’re a first-time buyer. If they don’t do this for you, you can file a return and pay the tax yourself.
Reliefs and exemptions
You may be eligible for Stamp Duty Land Tax (SDLT) reliefs if you’re buying your first home and in certain other situations. These reliefs can reduce the amount of tax you pay. You must complete an SDLT return to claim relief, even if no tax is due.
You don’t have to pay SDLT or file a return if:
- no money or other payment changes hands for a land or property transfer
- property is left to you in a will
- property is transferred because of divorce or dissolution of a civil partnership
- you buy a freehold property for less than £40,000
- you buy a new or assigned lease of 7 years or more, as long as the premium is less than £40,000 and the annual rent is less than £1,000
- you buy a new or assigned lease of less than 7 years, as long as the amount you pay is less than the residential or non-residential SDLT threshold
- you use alternative property financial arrangements, eg to comply with Sharia law
Read HMRC’s guidance on transactions that don’t need a return.
Calculate the Stamp Duty on your second property using our instant calculator or book an appointment with one of our property experts. Call us on 0800 862 0870 or book a free valuation on your home today.
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