Tax & Accountancy
Stamp duty for landlords in 2026: the second-home surcharge | August
Stamp duty for landlords in 2026: the second-home surcharge explained
If you are buying an additional property in England or Northern Ireland, whether to let, as a second home or as an investment, you pay standard stamp duty plus a 5% surcharge on every band of the price. That surcharge rose from 3% to 5% on 31 October 2024, and since 1 April 2025 the tax-free threshold has been back at £125,000, so landlords now pay on lower-value purchases that briefly escaped tax and at higher rates throughout. This guide explains the rates, works through some examples, and covers the parts that matter most to landlords: company purchases, the refund when you are replacing a main home, and how the picture differs in Scotland and Wales. The figures are current as at June 2026, and the Autumn 2025 Budget left them unchanged.
What stamp duty is
Stamp duty, properly Stamp Duty Land Tax, is the tax paid on buying property or land over a certain value in England and Northern Ireland. It is due when you buy a freehold, take on a new or existing leasehold, buy through shared ownership, or otherwise acquire a chargeable interest in land. It is a one-off cost at purchase, separate from the ongoing taxes on a rental, which sit within a landlord's wider tax position. Scotland and Wales have their own equivalents, covered below.
The rates you pay on an additional property
The surcharge, formally the higher rates for additional dwellings, adds 5% to every slice of the standard residential rates, including the slice that would otherwise be tax-free. It applies when, at the end of the day of the purchase, you own two or more residential properties and the new one is not replacing your main home, and it covers second homes, holiday lets and buy-to-let alike. It does not apply to purchases under £40,000.
Portion of the price | Standard rate | Additional-property rate |
|---|---|---|
Up to £125,000 | 0% | 5% |
£125,001 to £250,000 | 2% | 7% |
£250,001 to £925,000 | 5% | 10% |
£925,001 to £1,500,000 | 10% | 15% |
Above £1,500,000 | 12% | 17% |
A landlord therefore pays considerably more than someone buying the same home to live in. To see the figure for a specific price, you can work out your stamp duty with our calculator.
How the recent changes stack up
Two separate changes brought us to today's position, and they happened on different dates. First, the surcharge on additional properties rose from 3% to 5%, effective 31 October 2024. Second, the temporary higher nil-rate threshold introduced in 2022 expired, so from 1 April 2025 the standard nil-rate band reverted from £250,000 to £125,000. At the same time as the surcharge rise, the flat rate charged when a company buys a single dwelling over £500,000 rose from 15% to 17%. The Autumn 2025 Budget announced no further SDLT rate changes, so these rates carry into 2026.
Worked examples
The surcharge is easiest to grasp by comparing the bill on the same property bought as a main home and as an additional property.
Purchase price | As a main residence | As an additional property |
|---|---|---|
£200,000 | £1,500 | £11,500 |
£300,000 | £5,000 | £20,000 |
£500,000 | £15,000 | £40,000 |
A £300,000 buy-to-let, for instance, attracts £20,000 of stamp duty: 5% on the first £125,000, 7% on the next £125,000, and 10% on the final £50,000. Under the thresholds that applied before April 2025 the same purchase would have cost £17,500, so the threshold change alone added £2,500.
Buying through a company
Many landlords hold property through a limited company, and the stamp duty treatment differs in two ways. A company always pays the 5% surcharge, on every band from the first pound, because the main-residence exception cannot apply to a company. And where a company, or another non-natural person, buys a single dwelling for more than £500,000, a flat 17% rate can apply to the whole price, although reliefs exist, notably for genuine property rental businesses, that can remove that flat charge and bring the purchase back to the ordinary rates plus surcharge. The interaction is fiddly and the relief conditions are strict, so this is a point to confirm with an accountant before committing to a corporate purchase.
When you can reclaim the surcharge
The surcharge is aimed at additional properties, not at people moving home, but timing can catch you out. If you buy your new main residence before selling your old one, you will own two properties on completion day and must pay the surcharge. You can reclaim it if you sell your previous main home within 36 months of the new purchase, and you must apply for the refund within 12 months of that sale. If you can arrange to sell before you buy, you avoid paying the surcharge in the first place.
Other points landlords should know
A few further rules round out the picture. First-time buyers, though not landlords, get relief up to £300,000 with a reduced rate to £500,000 and nothing above that, which is worth knowing if you are helping family. Multiple Dwellings Relief, which once softened the cost of buying several dwellings at once, was abolished from 1 June 2024, so portfolio purchases no longer benefit from it, although buying six or more dwellings in a single transaction can still be treated as non-residential and taxed at the lower commercial rates. Commercial and mixed-use purchases are unaffected by the residential surcharge and thresholds. And a non-UK resident pays a further 2% on top of everything else.
Scotland and Wales
Stamp duty applies only in England and Northern Ireland. In Scotland you pay Land and Buildings Transaction Tax with an Additional Dwelling Supplement, which rose to 8% in December 2024. In Wales you pay Land Transaction Tax with a higher-rate surcharge of 5%. The bands and thresholds differ in each, so a Scottish or Welsh purchase needs its own calculation rather than the SDLT figures above.
Practical tips
Three things help. Plan for the bigger upfront bill and get an accurate figure before you make an offer, because near a band threshold even a small price reduction can save thousands, and it helps to track the costs of a new purchase from the outset. Time your transactions so that, where possible, you sell before you buy and avoid the surcharge altogether, keeping the 36-month refund window in mind if you cannot. And let the higher tax inform the deal rather than derail it: revisit the rental yield so the numbers still work with the surcharge included, and factor it in alongside the buy-to-let mortgage when you appraise the purchase.
Frequently asked questions
How much stamp duty does a landlord pay on a second home?
Standard rates plus a 5% surcharge on every band. On a £300,000 property that is £20,000; on £500,000 it is £40,000. Purchases under £40,000 are not caught.
Do I pay the surcharge if I am replacing my main home?
If you complete the purchase before selling your old main residence you pay the surcharge, but you can reclaim it if you sell the old home within 36 months, applying within 12 months of that sale.
Does the surcharge apply to companies?
Yes, and from the first pound, with no main-residence exception. A company buying a single dwelling over £500,000 may also face a 17% flat rate unless a relief applies.
Does stamp duty apply in Scotland and Wales?
No. Scotland charges Land and Buildings Transaction Tax with an 8% Additional Dwelling Supplement, and Wales charges Land Transaction Tax with a 5% higher-rate surcharge. If you want your purchase and running costs organised in one place, you can start for free.
This article is general information, not tax advice, and tax rules change. Take advice from a qualified accountant or conveyancer on your specific circumstances before acting.
Author
August Team
The August editorial team lives and breathes rental property. They work closely with a panel of experienced landlords and industry partners across the UK, turning real-world portfolio and tenancy experience into clear, practical guidance for small landlords.
