Overview
5% SDLT surcharge on additional dwellings
From 31 October 2024, landlords and second home buyers pay an additional 5% SDLT surcharge on the purchase of residential property in England. This is on top of standard SDLT rates. A �300,000 buy-to-let purchase now incurs approximately �26,500 in SDLT (vs �5,000 for a first-time buyer).
SDLT rates for additional dwellings (landlords) from 31 October 2024
- �0��250,000: 5% (standard 0% + 5% surcharge)
- �250,001��925,000: 10% (standard 5% + 5% surcharge)
- �925,001��1,500,000: 15% (standard 10% + 5% surcharge)
- Over �1,500,000: 17% (standard 12% + 5% surcharge)
- The surcharge applies to: buy-to-let purchases, second homes, holiday lets, and any residential purchase where the buyer already owns a residential property
- The surcharge does not apply to: first residential property purchases, purchases by certain public bodies, certain large investor purchases (subject to multiple dwellings relief rules)
When the 5% surcharge applies
- The surcharge applies if, at the end of the day of completion, you own (or part-own) another residential property anywhere in the world
- Spouses and civil partners: if your spouse or civil partner owns a residential property, the surcharge typically applies to your purchase, even if you are buying in your sole name
- Company purchases: corporate buyers pay the 15% flat rate SDLT for properties above �500,000 (under the Annual Tax on Enveloped Dwellings envelope rules), the standard surcharge table does not apply in the same way for higher-value company purchases
- Mixed-use properties (e.g. flat above a shop): SDLT is charged at commercial rates (up to 5%), which may be lower than the residential surcharge rate depending on the purchase price
- New build purchases: the surcharge applies to new builds in the same way as resale properties, developers' SDLT incentives (stamp duty paid promotions) are typically only available to first-time buyers
Buying in a limited company (SPV)
- An SPV (limited company) buying residential property pays the surcharge rates, the same additional 5% applies
- Properties purchased by a company for more than �500,000 may also be subject to the Annual Tax on Enveloped Dwellings (ATED), an annual charge on high-value residential property held in a corporate envelope
- ATED 2025/26 rates: �500,001��1m = �4,400/year; �1m��2m = �9,000/year; �2m��5m = �30,550/year; above �5m: higher rates apply
- ATED relief: residential property used for a qualifying rental business is typically exempt from ATED, but the relief must be claimed annually via an ATED return
- Take specialist tax advice before deciding whether to purchase in a company, the SDLT cost is the same, but corporation tax, mortgage interest deductibility, and extraction tax differ significantly from personal ownership
SDLT refund, replacing your main residence
- If you pay the surcharge because you own another property, but you sell your previous main residence within 3 years of the new purchase, you can claim a refund of the surcharge
- The refund is claimed via HMRC's SDLT amendment process within 12 months of the sale of the previous main residence (or within 12 months of the 3-year anniversary of the new purchase if later)
- This refund provision is designed for people who move home while their old home has not yet sold, it does not apply to landlords who buy BTL without the intention of replacing their main residence
- Claim the refund via HMRC's online SDLT refund claim, provide the SDLT reference for the original transaction and evidence of the sale of the previous main residence