Standard vs Buy-to-Let Stamp Duty 2026
Compare standard residential SDLT rates with buy-to-let rates including the 5% additional property surcharge. See exactly how much extra landlords and second home buyers pay at every price point.
Key Points
- •BTL/second home buyers pay 5% surcharge on TOP of standard rates (from Oct 2024)
- •Surcharge applies to the full purchase price, added to each band
- •On a £300,000 property: standard pays £5,000, BTL pays £20,000
- •Refund possible only when replacing main residence (3-year window)
What is the Additional Property Surcharge?
The additional property surcharge (previously known as the additional dwelling supplement) is a 5% tax added on top of standard Stamp Duty Land Tax (SDLT) rates when purchasing a buy-to-let property or second home in England and Northern Ireland.
This surcharge was increased from 3% to 5% on 31 October 2024, making it significantly more expensive to build a property portfolio or purchase holiday homes. The surcharge is calculated on the full purchase price and added to each rate band.
Unlike standard SDLT which is charged in bands (only the portion in each band is taxed at that rate), the 5% surcharge applies to the entire purchase price. This means buying investment property is now considerably more expensive than purchasing a primary residence.
Important: The surcharge applies even if you've never owned property before. If your first property purchase is a buy-to-let investment rather than your main home, you pay the higher rates.
Rate Bands Compared
The table below shows how the 5% surcharge is added to each standard SDLT rate band. Buy-to-let and second home buyers pay substantially more at every price level.
| Property Value Band | Standard Rate | BTL Rate (+5%) |
|---|---|---|
| Up to £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% |
Note: These rates apply to England and Northern Ireland only. Scotland and Wales have separate tax systems (see below).
Worked Examples
See exactly how much extra buy-to-let and second home buyers pay compared to standard residential purchases across different property prices.
| Property Price | Standard SDLT | BTL SDLT | Surcharge Cost |
|---|---|---|---|
| £150,000 | £500 | £8,000 | £7,500 |
| £250,000 | £2,500 | £15,000 | £12,500 |
| £300,000 | £5,000 | £20,000 | £15,000 |
| £400,000 | £10,000 | £30,000 | £20,000 |
| £500,000 | £15,000 | £40,000 | £25,000 |
| £750,000 | £27,500 | £65,000 | £37,500 |
Example Calculation: £300,000 Buy-to-Let
- • First £125,000 @ 5% = £6,250
- • Next £125,000 @ 7% = £8,750
- • Final £50,000 @ 10% = £5,000
- Total SDLT: £20,000
Compare to standard residential: £5,000. The surcharge adds £15,000 (equivalent to 5% of the full purchase price).
When Does the Surcharge Apply?
The 5% additional property surcharge applies in the following scenarios:
Surcharge Always Applies To:
- •Buy-to-let purchases – Any property purchased for rental income, even if it's your first property
- •Second homes – Holiday homes, weekend retreats, or any additional residential property
- •Additional properties – Buying any property when you already own another residential property
- •Property companies – Companies purchasing residential property (with rare exceptions)
Temporary Surcharge Payment
If you are buying a new main residence before selling your old one, you must pay the 5% surcharge upfront. However, you can claim a refund if you sell your previous main residence within 3 years (see Refund Rules below).
This means you temporarily pay buy-to-let rates even though you're replacing your primary home. HMRC requires the higher payment initially and processes refunds after you complete the sale of your old property.
When Surcharge Does NOT Apply
- •Purchasing your only or main residence (and you don't own other property)
- •Property valued at £40,000 or less (unless purchased with other properties)
- •Caravans, mobile homes, or houseboats (different rules apply)
Refund Rules
If you are replacing your main residence, you can claim a refund of the 5% additional property surcharge if you sell your previous main home within 3 years of purchasing the new property.
Refund Requirements:
- Old property was your only or main residence
- New property becomes your main residence
- Old property sold within 3 years of new purchase
- Claim submitted within 12 months of sale completion
How to Claim Your Refund
To claim your surcharge refund, you must amend your original SDLT return via HMRC's online service. You'll need:
- •Your SDLT reference number from the new property purchase
- •Completion date of the sale of your old property
- •Evidence that the old property was your main residence
HMRC typically processes refunds within 4-6 weeks. The refund amount equals exactly 5% of the new property's purchase price (the full surcharge you paid).
Important: Buy-to-let purchases are NOT eligible for surcharge refunds. The refund only applies when replacing your main residence, not when building an investment portfolio.
Scotland and Wales Surcharges
Scotland: Additional Dwelling Supplement (ADS)
Scotland's Land and Buildings Transaction Tax (LBTT) includes an Additional Dwelling Supplement (ADS) of 8% on the full purchase price for second homes and buy-to-let properties.
This is 3% higher than England's surcharge, making Scotland's additional property tax the highest in the UK. The ADS applies to properties over £40,000 and is added on top of standard LBTT rates.
Wales: Higher Rates for Additional Properties
Wales uses Land Transaction Tax (LTT) with separate higher-rate bands for additional properties. Instead of a flat surcharge, Wales applies increased rates across different price bands:
| Band | Standard Rate | Higher Rate |
|---|---|---|
| Up to £180,000 | 0% | 5% |
| £180,001 – £250,000 | 6% | 9.5% |
| Over £250,000 | 7.5%+ | 11.5%+ |
Both Scotland and Wales offer similar refund provisions when replacing your main residence, subject to their respective time limits and claim procedures.
Calculate Your Stamp Duty
Use our specialized calculators to work out your exact stamp duty bill for buy-to-let or second home purchases.
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.