Buy-to-Let Stamp Duty
The complete guide to stamp duty for landlords and investment properties.
In this article
+5%
Surcharge on all BTL
17%
Company rate (£500k+)
+2%
Non-resident extra
£40k
Min for surcharge
How BTL Stamp Duty Works
Buy-to-let properties are treated as "additional dwellings" for stamp duty purposes. This means you pay the standard SDLT rates plus the 5% additional property surcharge on the entire purchase price.
The surcharge applies even if this is your first buy-to-let property, as long as you already own (or are keeping) a residential property elsewhere.
BTL Stamp Duty Rates
| Band | Standard | BTL (+5%) |
|---|---|---|
| £0 - £125,000 | 0% | 5% |
| £125,001 - £250,000 | 2% | 7% |
| £250,001 - £925,000 | 5% | 10% |
| £925,001 - £1,500,000 | 10% | 15% |
| Over £1,500,000 | 12% | 17% |
Example BTL Calculations
| Property Price | Standard SDLT | BTL SDLT | Extra Cost |
|---|---|---|---|
| £150,000 | £500 | £8,000 | +£7,500 |
| £250,000 | £2,500 | £15,000 | +£12,500 |
| £400,000 | £10,000 | £30,000 | +£20,000 |
| £600,000 | £20,000 | £50,000 | +£30,000 |
Buying Through a Company
Limited Company Purchases
When a limited company buys residential property, the 5% surcharge always applies, regardless of whether the company owns other properties.
For properties over £500,000, a flat 17% rate may apply instead (the "corporate rate"). This is often more expensive than the standard tiered rates plus surcharge.
Company Advantages:
- • Corporation tax on profits (currently 25%) vs personal income tax
- • Full mortgage interest relief (not restricted to basic rate)
- • More flexibility for inheritance planning
- • Profits can be retained in the company
First-Time Landlords
Important: No FTB Relief for BTL
Even if you've never owned property before, you cannot claim first-time buyer relief on a buy-to-let property. FTB relief only applies to properties you intend to live in as your main residence. A BTL purchase will always attract the surcharge if you already own (or are keeping) another property.
Non-UK Resident Landlords
Additional 2% Non-Resident Surcharge
Non-UK residents pay an additional 2% on top of all other rates. Combined with the 5% additional property surcharge, non-resident BTL investors face a total 7% surcharge.
Example: £400,000 BTL for Non-Resident
- Standard SDLT: £10,000
- + 5% BTL surcharge: £20,000
- + 2% non-resident: £8,000
- = Total: £38,000
Portfolio Landlords
If you already own multiple buy-to-let properties, each additional purchase will attract the 5% surcharge. There's no relief for "professional landlords" or portfolio investors.
However, if you're buying multiple properties in a single transaction (e.g., a portfolio acquisition), you may be able to claim Multiple Dwellings Relief (MDR), which calculates tax based on the average property value rather than the total.
Tax Planning Considerations
Beyond stamp duty, landlords should consider:
- Income Tax: Rental income is taxed at your marginal rate (up to 45%)
- Mortgage Interest: Relief limited to basic rate (20%) for personal ownership
- Capital Gains Tax: 18% or 24% on disposal (depending on income)
- Inheritance Tax: Property is part of your estate
Many landlords now use limited companies for new purchases due to more favourable tax treatment, despite the stamp duty disadvantages. Always consult a tax advisor for your specific situation.
Scotland and Wales
Scotland charges 8% Additional Dwelling Supplement (ADS) on buy-to-let properties (increased from 6% in December 2024), while Wales uses separate higher residential rates (starting at 5% on additional properties, increased from flat 4% in December 2024). Scotland's ADS is higher than the England/NI 5% surcharge.
Emma Richardson, MRICS
Chartered Surveyor & Property Tax Specialist
Emma Richardson is a RICS-qualified Chartered Surveyor with over 12 years of experience in UK property taxation. She founded Stamp Duty Calculator to help buyers understand the complex world of property transaction taxes.