A guide to stamp duty surcharges on 2nd homes


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If you’re a homeowner considering buying a second house, it’s vital to get clued up on Stamp Duty.

A quick guide to Stamp Duty

For existing homeowners, you’re probably already very familiar with Stamp Duty, but if it’s a while since you last bought a house it’s well worth having a refresher. Stamp Duty is the tax charged to homebuyers by the government, charged on a tiered basis.

So, the higher the value of your home, the more Stamp Duty you’ll have to pay.

What does a ‘second home’ actually mean?

A second home refers to any property you own that isn’t your main home. This could be a buy-to-let, a house you’re buying for a family member, or a holiday home for example. So, if you were a part-owner of your son or daughter’s new home, you’d have to pay the higher rate of Stamp Duty tax.

If you already own a home abroad and are buying your first home in the UK, you will be subject to incremental Stamp Duty. However, if you are buying your second home abroad, you’ll be subject that country’s Stamp Duty laws.

How much is Stamp Duty on a Second Home?

While you don’t have to pay Stamp Duty on main homes under £250,000 (or up to £300,000 if you’re a first time buyer), you’ll have to pay a higher rate (an additional 3% on top of the current rate for that tier) if you are buying a second home.

Stamp Duty on only homes
In England and Ireland, there is currently a temporary reduction in rates. If your property is less than £250,000 then you are not currently required to pay Stamp Duty Land Tax (SDLT).
You will pay 5% on the sum between £250,001-£925,000
You will pay a further 10% on the sum between £925,001-£1.5m
You will pay a further 12% on the sum above £1.5m+
Stamp Duty on second homes
3% on homes up to the value of £250,000
You will pay a further 8% on the sum between £250,001-£925,000
You will pay a further 13% on the sum between £925,001-£1.5m
You will pay a further 15% on the sum above £1.5m+

What should I do if I’m buying a second home?

If you’re thinking about buying a second home, make sure you do the calculations on Stamp Duty before you buy. Include the tax in your house-buying budget to avoid expensive surprises, and remember that any Stamp Duty will be owed within 30 days of completion or you’ll risk getting lumped with a fine.

Sometimes, people end up buying a second home when the sale of their current home falls through, but they continue with their purchase regardless. If this happens, you will have to pay the extra Stamp Duty, but don’t forget to reclaim the extra money you’ve paid once your house is eventually sold – as long as it’s within 36 months of the date you bought your second home.