Stamp Duty on a Buy-to-Let in England and Northern Ireland
Buying a home to let usually means paying stamp duty at higher rates. Working out the figure early helps you judge whether a purchase stacks up.
What to know
- Stamp Duty Land Tax (SDLT) applies to property purchases in England and Northern Ireland.
- If the purchase means you’ll own more than one home, a 5% surcharge is usually added to each band.
- Non-UK residents usually pay a further 2% surcharge.
- Scotland and Wales have their own taxes and rates.
Stamp Duty Land Tax (SDLT) is paid when you buy property or land in England or Northern Ireland. For landlords, the key point is the higher rates for additional properties, which add 5% to every band.
The standard rates
For someone buying a single residential property, the rates are charged in bands, each on the part of the price within that band:
| Part of the price | Standard rate | With 5% surcharge |
|---|---|---|
| Up to £125,000 | 0% | 5% |
| £125,001 to £250,000 | 2% | 7% |
| £250,001 to £925,000 | 5% | 10% |
| £925,001 to £1.5 million | 10% | 15% |
| Over £1.5 million | 12% | 17% |
Who pays the higher rates
You’ll usually pay the extra 5% if, once the purchase completes, you own more than one residential property and you’re not replacing your main home. That covers most buy-to-let purchases by individuals. Companies buying residential property generally pay the higher rates too.
Buyers who aren’t UK resident usually pay a further 2% surcharge on top.
Worked examples
| Purchase price | Single property | Additional property |
|---|---|---|
| £180,000 | £1,100 | £10,100 |
| £250,000 | £2,500 | £15,000 |
| £300,000 | £5,000 | £20,000 |
For the £250,000 example with the surcharge: 5% of the first £125,000 is £6,250, and 7% of the next £125,000 is £8,750, giving £15,000.
Handy tip
Use HMRC’s online SDLT calculator with the exact price and your circumstances, and ask your conveyancer to confirm the figure before you exchange.
Paying and filing
Your conveyancer normally files the SDLT return and pays HMRC within 14 days of completion. The tax is usually paid in cash at completion, so it adds to the money you need upfront along with your deposit.
Scotland and Wales
Scotland has Land and Buildings Transaction Tax, with its own Additional Dwelling Supplement. Wales has Land Transaction Tax, with higher residential rates for additional properties. Their thresholds and rates differ from SDLT, so check the Revenue Scotland or Welsh Revenue Authority guidance.
Good to know
Tax rates and thresholds can change at Budgets and other fiscal events. Check GOV.UK for the rates that apply on your completion date.
Factoring stamp duty into your budget
On a typical buy-to-let, the surcharge can add thousands of pounds to the upfront cost and reduce your return for years. Include it when you work out rental yield and return on the cash you put in, and remember that rental profits are taxed too.
Your questions
When do I have to pay stamp duty?
You must send a return to HMRC and pay within 14 days of completion. Your solicitor or conveyancer usually handles this.
Do I pay the higher rates if I’m replacing my home?
Not if you’ve already sold your previous main home. If you buy before selling, you’ll usually pay the higher rates but may claim a refund if you sell the old home within 36 months.
Does the surcharge apply if I buy through a company?
Companies buying residential property generally pay the higher rates. Other rules can also apply, so take advice before buying.
This guide explains how UK borrowing works in general terms and isn’t financial advice. Rates, rules and lender criteria change, so check the details with the lender, GOV.UK or the Financial Conduct Authority before you decide. For advice on your own circumstances, speak to an FCA-authorised mortgage or financial adviser. If you borrow against your home, it may be repossessed if you do not keep up repayments.
