Additional property stamp duty surcharge: a 2026 guide for second homes and buy-to-let
Buying a second home, holiday let or buy-to-let in England or Northern Ireland adds an extra 5% to the stamp duty bill on every pound of the purchase price. The surcharge has been at this level since 31 October 2024, when the Chancellor's Budget raised it from the 3% rate that had applied since April 2016 (HMRC).
For a £300,000 second home that is a £15,000 line item on top of standard SDLT. For a £750,000 holiday house in Cornwall it is £37,500. The surcharge is a flat 5% of the entire purchase price, layered on top of every standard slab. The arithmetic is unforgiving and applies even when the buyer's main home is in another country.
This is a plain-English explanation of how the surcharge works in 2026 — what triggers it, what does not, when it can be reclaimed, and how married couples, joint buyers and inherited shares are treated. Eligibility and refund claims involve fact-specific HMRC rules that have been litigated repeatedly: a conveyancer should always confirm the position before completion.
The headline number: 5% on top of standard SDLT
Additional-property buyers pay the standard SDLT slab rates plus 5 percentage points at every band. The combined rates from 1 April 2025 onwards are:
| Slice of purchase price | Standard rate | Additional-property rate |
|---|---|---|
| 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% |
| Above £1,500,000 | 12% | 17% |
Source: HMRC, SDLT residential rates and Higher Rates for Additional Dwellings guidance.
Because the surcharge adds the same five points to every slab, the extra tax is mathematically equal to 5% of the whole purchase price. That is the cleanest way to estimate it on the back of an envelope.
Worked examples at common price points
The table below applies the rates above. Standard SDLT figures use the post-1-April-2025 thresholds.
| Purchase price | Standard SDLT | Additional-property SDLT | Surcharge premium |
|---|---|---|---|
| £200,000 | £1,500 | £11,500 | £10,000 |
| £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 |
| £1,000,000 | £43,750 | £93,750 | £50,000 |
These are England-and-Northern-Ireland figures only. Scotland uses Land and Buildings Transaction Tax with an Additional Dwelling Supplement currently at 8% on the whole purchase price (Revenue Scotland, ADS guidance). Wales uses Land Transaction Tax with separate higher residential rates (Welsh Revenue Authority, LTT higher rates). The amounts in the table above do not apply to either regime.
When the surcharge applies
The HMRC test for additional-property SDLT, set out in Schedule 4ZA of the Finance Act 2003, asks four questions about the transaction. The 5% surcharge applies if all of them are answered the same way:
- Is the property a residential dwelling worth £40,000 or more?
- Is the buyer (or any joint buyer) acquiring a major interest — typically freehold, or a leasehold of more than seven years?
- At the end of the day of completion, will the buyer (or any joint buyer or their spouse/civil partner) own two or more residential dwellings anywhere in the world?
- Is this purchase not a replacement of the buyer's only or main residence?
If yes to all four, the higher rates apply. The most common surcharge triggers in practice are:
- Buy-to-let purchases where the buyer already owns the home they live in.
- Holiday homes and second homes — coastal areas like Cornwall, North Devon and Brighton see a high share of these transactions, where buyers also pick up the local Band D council tax bill (Cornwall £2,591, North Devon £2,642, Brighton and Hove £2,581 in 2026-27, per Ministry of Housing council tax statistics).
- Adult children buying with parental help, where the parent ends up on the legal title for lender reasons. If the parent already owns a home the surcharge applies to the whole purchase, even if the child is the actual occupier.
- Companies and trusts acquiring any residential dwelling worth £40,000 or more — the surcharge applies on the first such property, not just additional ones.
When the surcharge does not apply
The Schedule 4ZA tests carve out several common scenarios:
- Replacing your only or main residence on the same day. If the previous main home is sold (legally completed) on or before completion of the new one, the standard rates apply with no surcharge — even if the buyer also owns a buy-to-let or holiday property. The replacement test is the most important exclusion, and the most often misapplied; HMRC has published detailed examples of what counts.
- Properties under £40,000. Below this de minimis the surcharge is not triggered, although standard SDLT will normally also be zero at that price.
- Mixed-use purchases (e.g. a flat above a shop). The non-residential SDLT rates apply instead, capped at 5%.
- Purpose-built student accommodation, certain caravans, houseboats and mobile homes. These are not "dwellings" for SDLT purposes.
- Inherited shares of 50% or less acquired in the last 36 months. A small inherited interest is disregarded for the purposes of counting how many dwellings the buyer owns.
Married couples and civil partners are treated as a single unit by HMRC. If either spouse owns another residential dwelling anywhere, the surcharge applies to the whole purchase — even if only one of them is on the new title.
Reclaiming the surcharge: the 36-month overlap rule
The most common refund situation arises when a buyer completes on a new main home before the sale of their old one — typical in chain breaks, where buyers complete with bridging finance or temporarily own two homes. In that case the surcharge is paid up front but can be reclaimed if the previous main residence is sold within three years of buying the new one (HMRC SDLT16 refund guidance).
The mechanics in summary:
- The buyer pays the higher rate at completion of the new home (the conveyancer will file the SDLT return).
- They have 36 months from the new purchase to sell the previous main residence.
- Once the old home is sold, they have 12 months from that sale (or from the SDLT filing date, whichever is later) to file a refund claim with HMRC.
- The refund is the difference between standard and higher rates — typically the same as 5% of the original price.
Refunds are filed on form SDLT16 online (the buyer's own login, not the conveyancer's) or by post. HMRC's manual sets out documentary requirements. Cases where the old home took longer than three years to sell, or where the buyer moved abroad and back, are common refusal grounds and have produced extensive First-tier Tribunal case law. A conveyancer or tax adviser should confirm eligibility before relying on a refund expectation.
How big is the affected market?
The data is striking. Of around 800,000 residential transactions completed in England and Wales in 2025 recorded in HM Land Registry, an estimated 200,000–250,000 fell in the £200,000–£400,000 band typical of buy-to-let acquisitions. At the post-October-2024 surcharge rates, that band carries a £10,000–£20,000 additional-property premium per purchase — a step change from the £6,000–£12,000 range that applied under the 3% surcharge before October 2024.
UK Finance reports that buy-to-let mortgage approvals fell sharply in late 2024 as the new rate took effect, and the segment has remained subdued through Q1 2026 (UK Finance, Mortgage Lending Trends). For investors, the surcharge premium is now a more meaningful slice of any first-year yield calculation than at any time since the higher-rates regime was introduced in 2016.
Joint buyers: one taints all
Where two or more people buy together, the surcharge is triggered if any one of them already owns another residential dwelling. There is no apportionment — the higher rate applies to the whole purchase price, not just the share belonging to the property-owning buyer. This catches a lot of family arrangements:
- A first-time buyer purchasing with a parent who already owns a home will pay higher rates on the whole purchase, and will not qualify for first-time buyer relief either (because the parent is not a first-time buyer). See the first-time buyer relief explainer for how that test works.
- Two siblings buying together where one owns a flat: full higher rates apply, even though the other is buying their first ever home.
The hidden costs of buying a UK house guide covers the broader cost stack a buyer should plan for in addition to SDLT — survey, conveyancing, mortgage fees and the running-cost line items.
Compare against the standard-buyer baseline
For context, the true cost of buying a £300,000 home guide walks through what an owner-occupier at the same price point pays — £5,000 SDLT, around £2,400 in conveyancing and survey fees, plus the monthly mortgage at the Bank of England April 2026 quoted 75% LTV 5-year fixed rate of 4.32%. An additional-property buyer at the same price faces three times that SDLT bill plus, in many cases, a higher LTV mortgage rate priced specifically for buy-to-let products.
The surcharge is one of several recent tax-and-cost shifts squeezing the additional-property segment: it sits alongside the loss of mortgage interest tax relief for individual landlords (now a 20% tax credit), and the Energy Performance Certificate compliance horizon requiring rental properties to reach EPC C from 2028 onwards.
Try the numbers for your postcode
Homecost's postcode tool returns recent transactions, EPC ratings and full cost-of-ownership estimates for any address in England and Wales — useful when sizing up a specific second-home target. Try Brighton (BN1 1AA) for a typical south-coast holiday-let location, or browse the rest of the Cost Intelligence guides for related pillar pieces.
This is general information, not advice. Speak to a qualified conveyancer or tax adviser before completing on any additional-property transaction, particularly if a refund claim or chain overlap may be involved.
Based on 30.98 million HM Land Registry transactions and 296 local authority council tax rates for 2026-27. Last updated 8 May 2026.