Second Home Stamp Duty
The complete guide to the 5% additional property surcharge.
In this article
5%
Surcharge rate
£40k
Minimum threshold
36
Months to claim refund
Apr 2025
Increased from 3%
What is the Second Home Surcharge?
The additional property surcharge (commonly called the "second home surcharge") is an extra 5% stamp duty charged on the purchase of additional residential properties.
The surcharge was introduced in April 2016 at 3% and increased to 5% in April 2025. It applies to the entire purchase price, not just portions above certain thresholds.
Second Home SDLT Rates
| Band | Standard Rate | With 5% Surcharge |
|---|---|---|
| £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 Calculations
| Property Price | Standard SDLT | Second Home SDLT | Extra Cost |
|---|---|---|---|
| £200,000 | £1,500 | £11,500 | +£10,000 |
| £300,000 | £5,000 | £20,000 | +£15,000 |
| £500,000 | £15,000 | £40,000 | +£25,000 |
| £750,000 | £27,500 | £65,000 | +£37,500 |
When Does the Surcharge Apply?
The surcharge applies if, at the end of the day of purchase, you will own two or more residential properties and you're not replacing your main residence.
The Surcharge DOES Apply To:
- ✓ Second homes and holiday homes
- ✓ Buy-to-let investment properties
- ✓ Properties bought by companies
- ✓ Buying a new home before selling your old one
- ✓ Properties where you have a beneficial interest over 50%
The £40,000 Threshold
The surcharge only applies to properties costing more than £40,000. Properties below this threshold don't attract the surcharge (though they still count as "additional properties" when assessing other purchases).
Replacement Main Residence
You can avoid the surcharge if you're replacing your main residence and selling your previous main home. The key conditions are:
- The new property will be your main residence
- You're selling (or have sold) your previous main residence
- The previous property was your main residence at some point in the 3 years before buying
The 36-Month Refund Rule
Claim Back the Surcharge
If you paid the surcharge because you bought a new home before selling your old one, you can claim a refund if you sell your previous main residence within 36 months.
Time limit: You must claim within 12 months of selling your old property, or within 12 months of filing your SDLT return (whichever is later).
Inherited Property
Inheriting a property can trigger the surcharge on future purchases, but there are important rules:
- Less than 50% share: If you inherit less than 50% of a property, it's ignored for surcharge purposes
- 50% or more: If you inherit 50% or more, it counts as an additional property
- 3-year rule: Inherited property is ignored if you inherited it within 3 years of buying and have a share of less than 50%
Married Couples
Important: Spousal Ownership
Married couples and civil partners are treated as a single unit. If either spouse owns another property, both are considered to own it for surcharge purposes. This applies even if only one person is buying the new property.
Property Abroad
The surcharge considers property ownership worldwide. If you own residential property in another country, it counts as an additional property for UK stamp duty purposes.
Scotland and Wales
| Region | Surcharge Rate | Name |
|---|---|---|
| England & NI | 5% | Higher Rates for Additional Dwellings |
| Scotland | 6% | Additional Dwelling Supplement (ADS) |
| Wales | 4% | Higher Rates |
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.