Stamp duty on second homes: Quick reference guide

If you’ve ever bought a property in the UK, you’ll know about Stamp Duty Land Tax (SDLT). But what about stamp duty on second homes? How is SDLT affected when you have multiple properties? Our quick reference guide will bring you up to speed.

Stamp Duty rules on second homes: The basics

If you’re buying a second residential property – i.e.: you already have a main residence – then you’ll have to pay a higher rate of SDLT. Usually, you’ll pay the regular stamp duty rate, but with 3% on top of that.

For a quick reminder on the main stamp duty brackets, you can consult our stamp duty guide. Alternatively, you can use a stamp duty calculator. Simply make the basic calculation based on the value of the property you want to buy, then add 3% of the value of the property itself.

Stamp Duty on second home calculation: A quick example

Let’s say you have a main home, and you want to buy a second residential property worth £500,000. The basic stamp duty charge would be £15,000. To this figure, you would add another £15,000 – 3% of the £500,000 value of the property.

In total, your full stamp duty on the second home would be £30,000.

Why do I have to pay more Stamp duty on my second home?

The extra 3% was added as a second home tax back in April 2016. This move was made by the government in response to the growing housing shortage crisis. The thinking was that discouraging the buying of second homes would free up more properties.

According to the BBC News, stamp duty brings in around £12 billion annually. The Government claims that much of this is reinvested in building affordable housing.

Is the Stamp Duty Holiday still going?

At the time of writing, the stamp duty holiday has just ended. On 1st October, the ‘tapered off’ stamp duty exemption on purchases up to £250,000 finished.

Right now, there are no plans to reintroduce the stamp duty holiday. All property purchases are now back to having the ‘standard’ pre-Covid levels of SDLT apply to them.

How do I avoid stamp duty on a second home?

There are a couple of ways to avoid paying the extra 3% second home tax. The main one is to sell your first home. If you sell your first residential property before buying the second, this extra 3% SDLT doesn’t apply.

If you buy your second home before selling the first, you’ll have to pay the extra 3%, but you can reclaim it later. Provided that you sell the first home within 36 months of purchasing the second, you can apply for a full refund of the additional 3% stamp duty paid.

Other ways to avoid this higher second home tax include:

  • Putting the deed and mortgage of the second property in the name of a family member. You have to intend to use the property as a home for them.
  • Buy a property worth £40,000 or less – all properties of this price are fully exempt from SDLT.
  • Buy a motorhome, caravan or houseboat – All these forms of property are also exempt from SDLT, no matter how much they cost.
Holiday homes in Cornwall

Can I add stamp duty to my mortgage?

You can tack the cost of your stamp duty onto a mortgage agreement. This will simply result in a higher mortgage. While this will cover the cost initially, be careful that it doesn’t push up your loan-to-value (LTV) ratio too much.


Hopefully, this quick reference guide has given you the right knowledge to factor into your purchasing decision. If you need more information on stamp duty refunds, or other SDLT rules, consult our dedicated guide.

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Jan Moys
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Jan Moys

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