Stamp Duty on a Holiday Let

Do You Pay Stamp Duty on a Holiday Let?

Yes. A holiday let, holiday home, or furnished holiday letting is a dwelling, so it is residential property for stamp duty and you pay Stamp Duty Land Tax (SDLT) at the standard residential rates on the purchase price. Because almost everyone buying one already owns a main residence, it is an additional dwelling, which adds the 5% surcharge on top in England and Northern Ireland, from the first £40,000 of the price.

On a £300,000 holiday let bought by someone who already owns a home, the tax is £5,000 of standard SDLT plus a £15,000 surcharge, or £20,000 in total. Enter your own price in our second home stamp duty calculator for the exact figure.

Are Holiday Lets Exempt From Stamp Duty?

No. There is no stamp duty exemption for holiday lets, and there is no reduced rate for them either. This is one of the most common misconceptions in the market, and it usually comes from mixing up two separate tax systems. A property let commercially as holiday accommodation can be treated as a business for income tax and for business rates. Neither of those changes what you pay on the purchase.

Commercial Property or Second Home?

This is the question most holiday let buyers actually want answered, because the difference is large. Residential rates plus the surcharge on a £500,000 purchase come to £40,000. The non-residential rates on the same price come to £14,500.

The statutory test is whether the building is used as a dwelling, or suitable for use as a dwelling. HMRC accepts in its manual at SDLTM00375 that a holiday chalet or furnished holiday letting occupied for short stays is not "used as" a dwelling by those short-term visitors, but says it may still be "suitable for use" as one, and that this is a question of fact in each case. In practice most holiday cottages, seaside flats and lodges are ordinary houses and flats, so they are suitable for use as a dwelling and the residential rates apply.

There are three routes to the non-residential rates, and they are narrower than the marketing around holiday let purchases often suggests:

• Six or more dwellings in one transaction. Section 116(7) of the Finance Act 2003 provides that where six or more separate dwellings are the subject of a single transaction, those dwellings are treated as not being residential property. A block of holiday lodges bought together can qualify. The rule made national news in September 2026: see the six-dwelling rule and the Providence House sale.
• A genuinely mixed-use purchase, where the transaction includes both residential and non-residential land, such as a cottage bought with a working commercial element. This is heavily litigated and HMRC challenges weak claims.
• A unit that is not suitable for use as a dwelling. Legal and planning conditions affecting use are a factor in that assessment, so a unit that cannot lawfully be occupied year round may fall outside the residential definition. It is fact-specific and it is not a general rule about holiday lets.

If you are buying at that scale or on a genuinely mixed title, use our commercial stamp duty calculator and take advice before filing. Claiming non-residential rates on an ordinary holiday cottage is the single most common way holiday let buyers end up in an HMRC enquiry.

The 5% Additional Property Surcharge

The additional property surcharge is the single biggest factor in a holiday let tax bill. It applies whenever you will own two or more residential properties at the end of the day the purchase completes, and a holiday let bought alongside your existing main residence meets that test. The surcharge is 5% on top of every standard band, and it starts once the price reaches £40,000. The standard residential bands it sits on top of are 0% up to £125,000, 2% to £250,000, 5% to £925,000, 10% to £1.5 million and 12% above that.

For this surcharge, married couples and civil partners who are living together are treated as a single unit, so a holiday let bought in one spouse's sole name still counts as an additional property if the couple owns a main home. Check your position with our surcharge risk checker or read the £40,000 threshold explained.

Worked Examples by Price

The table shows the England and Northern Ireland SDLT on a holiday let at common prices, both for the rare case where it is your only property (standard rates) and the usual case where you already own a home (with the 5% surcharge).

For a full breakdown at every price point, see stamp duty by property price.

No First-Time Buyer Relief

First-time buyer relief is not available on a holiday let. The relief requires that you intend to occupy the property as your only or main residence, which a holiday let by definition is not. In practice the question rarely arises, because anyone who already owns a property is not a first-time buyer in the first place. If you are genuinely buying your very first property and it will be your main home, use our first-time buyer calculator instead.

Buying Through a Limited Company

Buying a holiday let through a company does not avoid the surcharge. A company pays the additional property rates on residential purchases from the first pound, with no £40,000 starting point and no main residence exception, because a company cannot have a main residence. On top of that, a company buying a single dwelling for more than £500,000 can fall into the flat 17% rate unless a relief such as the property rental business relief applies.

Work the numbers through our limited company stamp duty calculator, and see company versus personal ownership for how the purchase tax compares before you decide the structure.

Holiday Lets in Scotland and Wales

Stamp duty is devolved, so a holiday let in Scotland or Wales follows different rules and a different surcharge:

• Scotland (LBTT): residential Land and Buildings Transaction Tax applies, plus the Additional Dwelling Supplement of 8% on the full price. Estimate it with our Scotland LBTT calculator.
• Wales (LTT): Land Transaction Tax applies, with a separate set of higher residential rate bands for additional properties rather than a flat surcharge added to the main rates. Use our Wales LTT calculator.

The FHL Abolition Did Not Change Stamp Duty

The furnished holiday lettings tax regime was abolished from 6 April 2025, and from 1 April 2025 for Corporation Tax. This is a common source of confusion, so it is worth being precise: the change affects income tax and capital gains tax, including mortgage interest relief, capital allowances and the capital gains reliefs that FHL owners used to get. It does not touch stamp duty, and stamp duty was never part of that regime in the first place.

For SDLT a holiday let is, and remains, residential property taxed at residential rates with the additional dwelling surcharge where it applies. Whether you let it commercially, use it yourself, or do both, the stamp duty on the purchase is the same.

Common Questions