Key facts
- Buy-to-let purchases attract the standard SDLT rates plus a 5% surcharge on each band.
- The surcharge was raised from 3% to 5% from 31 October 2024 (Autumn Budget 2024).
- The surcharge applies if you already own (or will own) more than one residential property.
- Companies buying residential property always pay the surcharge, regardless of how many properties they own.
- A refund of the surcharge may be available if you sell your previous main home within 36 months.
Overview
When you buy a residential property in England or Northern Ireland that is not your only home, you pay Stamp Duty Land Tax (SDLT) at the standard rates plus a 5% surcharge on each band. This surcharge applies to buy-to-let properties, second homes, and holiday homes.[1]
Autumn Budget 2024 change: The surcharge for additional dwellings was increased from 3% to 5% from 31 October 2024. This applies to purchases completing on or after that date.[3]
Current SDLT Rates for Buy-to-Let (2025/26)
The following rates apply to buy-to-let and second home purchases completing from 1 April 2025:[1]
| Purchase Price Band | Standard Rate | Surcharge | Buy-to-Let Rate |
|---|---|---|---|
| Up to £125,000 | 0% | 5% | 5% |
| £125,001 – £250,000 | 2% | 5% | 7% |
| £250,001 – £925,000 | 5% | 5% | 10% |
| £925,001 – £1,500,000 | 10% | 5% | 15% |
| Over £1,500,000 | 12% | 5% | 17% |
Worked Examples
Example 1: £250,000 buy-to-let purchase
| Band | Amount | Rate | SDLT |
|---|---|---|---|
| Up to £125,000 | £125,000 | 5% | £6,250 |
| £125,001 – £250,000 | £125,000 | 7% | £8,750 |
| Total SDLT | £15,000 | ||
Without the surcharge, a £250,000 purchase as a main residence would attract £2,500 in SDLT. The surcharge adds an extra £12,500.
Example 2: £400,000 buy-to-let purchase
| Band | Amount | Rate | SDLT |
|---|---|---|---|
| Up to £125,000 | £125,000 | 5% | £6,250 |
| £125,001 – £250,000 | £125,000 | 7% | £8,750 |
| £250,001 – £400,000 | £150,000 | 10% | £15,000 |
| Total SDLT | £30,000 | ||
When Does the Surcharge Apply?
The 5% surcharge applies if, at the end of the day of purchase, you own (or are treated as owning) two or more residential properties. This includes:[2]
- Buying a buy-to-let while owning your main home
- Buying a second home or holiday home
- Buying a new main home before selling your old one (refundable — see below)
- Properties owned anywhere in the world count (not just UK properties)
Companies Buying Residential Property
Companies purchasing residential property always pay the 5% surcharge, even if it is their first property. Additionally, if the purchase price exceeds £500,000, a flat rate of 17% applies to the entire purchase price instead of the banded rates.[2]
Refund of the Surcharge
If you buy a new main home before selling your previous main home, you will temporarily own two homes and pay the surcharge. You can claim a refund of the surcharge if you sell your previous main home within 36 months of buying the new one.[2]
This refund does not apply to buy-to-let purchases — the surcharge on a buy-to-let is permanent.
SDLT as a CGT Deduction
Although SDLT is not deductible from rental income, it forms part of your allowable acquisition costs for CGT purposes. When you eventually sell the property, you can include the SDLT you paid when calculating your capital gain. See our guide to CGT on rental property.
Tip: Factor the 5% SDLT surcharge into your investment calculations before purchasing a buy-to-let. On a £300,000 property, the surcharge alone adds £15,000 to your upfront costs — a significant drag on returns.
Frequently Asked Questions
How much extra SDLT do I pay on a buy-to-let purchase?
You pay the standard SDLT rates plus 5% on each band. For example, a £250,000 buy-to-let purchase currently attracts £12,500 in SDLT (5% surcharge on the first £250,000), compared to £0 for a main residence purchase under the temporary threshold. The surcharge was increased from 3% to 5% from 31 October 2024.
Does the surcharge apply to my first buy-to-let if I already own my home?
Yes. If you own your main home and purchase a buy-to-let, you will own more than one residential property, so the 5% surcharge applies to the buy-to-let purchase.
Can I get a refund of the SDLT surcharge?
Only in specific circumstances. If you bought a new main home before selling your old one (so temporarily owned two homes), you can claim a refund of the surcharge within 36 months of selling the old home. This does not apply to buy-to-let purchases.
Is SDLT deductible from rental income?
No. SDLT is a capital cost of purchasing the property. It is not deductible from rental income, but it forms part of your acquisition costs for CGT purposes when you eventually sell.
Further Reading
- CGT on Rental Property — tax when you sell
- Incorporating a Property Business — SDLT implications of transfers
- Tax Obligations for Landlords — all taxes landlords pay
- Allowable Costs & Deductions (CGT) — what reduces your capital gain
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