Landlords and second-home buyers in England pay an additional 5% Stamp Duty Land Tax (SDLT) surcharge on every residential property they buy that is not replacing a main residence. The surcharge was raised from 3% to 5% in October 2024, and the Multiple Dwellings Relief that once softened the blow for portfolio acquisitions was abolished in June 2024.
This page explains exactly who pays the surcharge, how to calculate it against the current SDLT bands, the main-residence reclaim window, and the rules for limited companies. Use the LetSafe Portfolio Tracker to model the full acquisition cost including SDLT before committing to any purchase.
Current SDLT rates for buy-to-let and second homes (2026)
The 5% surcharge stacks on top of the standard residential SDLT bands. There is no nil-rate threshold for the surcharge — even the first pound of consideration attracts 5% when buying an additional property.
- Up to £125,000: Standard 0% + 5% surcharge = 5% effective rate
- £125,001–£250,000: Standard 2% + 5% surcharge = 7% effective rate
- £250,001–£925,000: Standard 5% + 5% surcharge = 10% effective rate
- £925,001–£1.5 million: Standard 10% + 5% surcharge = 15% effective rate
- Over £1.5 million: Standard 12% + 5% surcharge = 17% effective rate
Who pays the additional-rate surcharge?
The higher rate applies whenever one of the following conditions is met at completion:
- Existing property owner: the buyer already owns any residential property anywhere in the world and is not selling their main residence on the same day
- Limited companies: all corporate buyers always pay the higher rate regardless of any other property ownership — a new SPV's first acquisition is still subject to the surcharge
- Married couples / civil partners: if either partner owns another residential property not being replaced, both are assessed together and the higher rate applies to the full transaction price
- Joint purchasers: if any single purchaser in a joint acquisition triggers the higher rate, it applies to the full consideration for all buyers in the transaction
Main residence replacement: the 3-year reclaim window
If you buy a new main residence before your existing main residence has sold — for example when a chain doesn't align — you pay the higher-rate surcharge upfront at completion. You can then reclaim the surcharge once the old main residence sells, provided the sale completes within 3 years of the new purchase.
The reclaim is made by amending the SDLT return. You must submit within 12 months of the date of the sale of the former main residence, or within 12 months of the filing date of the original SDLT return, whichever is later. Your conveyancing solicitor should handle the reclaim as part of the transaction, so confirm this is in scope when you instruct them.
Multiple Dwellings Relief abolished from June 2024
Multiple Dwellings Relief (MDR) previously allowed buyers acquiring two or more dwellings in a single transaction to average the price per dwelling when calculating SDLT, significantly reducing the effective rate on portfolio acquisitions and block-of-flat purchases.
MDR was abolished for all transactions completing on or after 1 June 2024. Portfolio purchases completing after that date attract the full higher-rate SDLT on the total consideration with no averaging benefit. Transactions exchanged before 6 March 2024 and completing by 1 June 2024 could still use MDR under transitional provisions — anything outside those windows is not eligible.
Wales and Scotland use different surcharges
SDLT applies in England and Northern Ireland only. In Wales, Land Transaction Tax (LTT) applies with a higher-rates-for-additional-dwellings surcharge currently at 4%. In Scotland, Land and Buildings Transaction Tax (LBTT) applies with the Additional Dwelling Supplement (ADS) at 6%. Each devolved tax has its own rules, reliefs, and filing deadlines — get jurisdiction-specific advice for Welsh or Scottish purchases.
Filing and paying SDLT: the 14-day deadline
SDLT must be filed and paid to HMRC within 14 days of completion on residential transactions. Your conveyancing solicitor or licensed conveyancer normally files the SDLT1 return as part of the conveyancing process — confirm this is included in their quoted fee. Late returns attract automatic fixed penalties (£100 for up to 3 months late, £200 for 3–12 months) plus interest on the unpaid tax from the 14-day deadline. For complex transactions involving linked purchases, reliefs, or corporate buyers, instruct a specialist tax adviser rather than relying solely on HMRC's online calculator.
Frequently asked questions
How much stamp duty do I pay on a £200,000 buy-to-let?+
On a £200,000 buy-to-let in England in 2026: 5% on the first £125,000 = £6,250, then 7% on the remaining £75,000 = £5,250. Total SDLT = £11,500. Compare that to a first-time buyer at £0 on the same property under first-time buyer relief, or a standard home-mover at £1,500 (no surcharge). The surcharge component alone is £10,000 (5% across the full £200,000).
Do I pay the surcharge on a buy-to-let in a limited company?+
Yes. Limited companies always pay the higher-rate SDLT on residential purchases, regardless of whether the company already owns property. A newly incorporated SPV buying its first property still pays the 5% surcharge. There is no exemption for new companies or first acquisitions.
I inherited a property. Does that mean I now pay the higher rate on any other purchase?+
Yes. An inherited residential property counts as ownership of another residential property for SDLT purposes. If the inherited property remains in your name when you buy a further residential property — and you are not replacing a main residence — the 5% surcharge applies. This catches many people who had not intended to become landlords and had not planned for the SDLT implications.
Can I avoid the surcharge by buying through a partnership?+
Partnerships are generally transparent for SDLT purposes — each partner's individual ownership of other properties is taken into account. If any partner already owns residential property, the higher-rate charge typically applies to the full transaction. Structuring acquisitions through LLPs, limited partnerships, or other vehicles requires specialist tax and legal advice, as the rules are complex and HMRC is alert to artificial arrangements.
Does the surcharge apply to commercial property I buy?+
No. Non-residential and mixed-use properties use different SDLT rate tables and are not subject to the residential higher-rate surcharge. However, where a transaction involves both residential and commercial elements, it may be possible to elect for non-residential treatment, eliminating both the residential rate and the surcharge. Specialist advice is essential on any mixed-use transaction.