Stamp Duty for Second Homes

Stamp duty for second homes



From April 2016, Stamp Duty liability for anyone purchasing an additional property has increased.  The majority of buy to let purchases attract an additional 3% stamp duty.  Purchases of properties £40,000 or less are not liable for stamp duty.  Above this threshold, the higher stamp duty rate will apply unless your total individual ownership is limited to a single dwelling i.e. you do not already own other residential property.

How much will it cost?

The additional stamp duty charge is a flat 3% levied on the whole value of properties worth more than £40,000.

Stamp Duty Rates for additional properties

Tax Band %
£40k – £125k 3
£125k to £250k 5
£250k to £925k 8
£925k to £1.5m 13
£1.5m+ 15

You pay the extra stamp duty rate on top of the normal stamp duty rate. For example, if the second home you are purchasing is worth £250,000 you would pay a total stamp duty bill of £10,000 as opposed to only £2,500 if it was your only property.

Are there any exemptions?

There are a few cases where you won’t have to pay the additional stamp duty rate:

  • If you are buying a property worth less than £40,000.
  • Caravans, mobile homes or houseboats regardless of purchase price
  • Buying a home you intend to live in you won’t pay the additional rate provided you have sold your existing home.

We offer Mortgage Advice

A few frequently asked questions are below, however, for any stamp duty related queries or advice on a mortgage for a second property, please get in touch via any links given below.

Do I have to pay if I’m a first-time buyer?

You won’t have to pay the stamp duty for second homes because you’ll only own one property. However, you will pay if you have inherited a property, are buying with someone else who already owns another property, or you have a part share in another property.

What if I plan to live in the property I’m buying?

Things can get a little complex here!  If the property you are purchasing is to replace your main residence then the additional stamp duty rate isn’t payable, however, you have to have sold your original main residence.

If you haven’t sold your main residence and still want to purchase another home, you will be liable to pay the stamp duty for second homes, however, if you sell the original home within 3 years, you will be able to claim the extra stamp duty back.

If you own a buy-to-let property, live in rented accommodation and are buying a home to live in, again, you will be liable to pay the stamp duty tax. Although rented accommodation doesn’t class as your main residence because you don’t own it, you still own a property.

If you are in doubt you should contact HMRC for clarification.


How do I claim a stamp duty refund?

If you sell you previous main home within three years, you are able to claim a refund. If you think you may have paid the higher rate of stamp duty in error, then you are also able to apply for a repayment.

You can apply for a repayment of the higher rates of stamp duty tax via the Governments website and you will need to provide your details to HMRC including the address of the property you paid the higher rate on as well as the address of your previous main residence.  They need to know how much you paid in total and how much wish to claim back.


If approved, HMRC should pay you back within 15 working days.




We love to hear from you! If you need any assistance with your mortgage or have a stamp duty related query – get in touch!


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