Buying a second home in England or Northern Ireland triggers the higher rates of Stamp Duty Land Tax — standard rates plus a 5% surcharge in every band. The surcharge has been at 5% since 31 October 2024 (it was previously 3%). This article covers who has to pay it, when it doesn't apply, and how to reclaim it if you bought a new main home before selling your old one.

What HMRC counts as a "second home"

Forget the everyday meaning. For SDLT, a "second home" is any residential property you'll own at the end of the day of completion that isn't replacing your only or main residence. The rules look at all residential interests you hold anywhere in the world, including:

• A flat you bought as an investment and let to tenants
• A holiday home in the UK or abroad
• A share of a property you inherited
• A jointly-owned property in just your spouse or civil partner's name (married couples are treated as a unit)
• A property held in a trust you can benefit from

If any of these apply when you complete on the new purchase, the higher rates kick in for the whole price.

The numbers: how the surcharge actually works

The 5% surcharge stacks on top of every standard band. Each slice of the price gets charged 5 percentage points more:

Portion of price	Standard	Second home / additional
Up to £125,000	0%	5%
£125,001 – £250,000	2%	7%
£250,001 – £925,000	5%	10%
£925,001 – £1,500,000	10%	15%
Over £1,500,000	12%	17%

Worked examples

• £250,000 second home: £125,000 × 5% + £125,000 × 7% = £15,000 (effective 6%).
• £400,000 second home: £125,000 × 5% + £125,000 × 7% + £150,000 × 10% = £30,000 (effective 7.5%).
• £600,000 second home: £125,000 × 5% + £125,000 × 7% + £350,000 × 10% = £50,000 (effective 8.3%).
• £1,000,000 second home: £125k × 5% + £125k × 7% + £675k × 10% + £75k × 15% = £93,750 (effective 9.4%).

Compare to a same-priced main home and the surcharge is usually between £20,000 and £40,000 extra for typical UK second-home prices.

When the surcharge does NOT apply

The 5% surcharge is off the table in these situations:

The property costs less than £40,000

The surcharge has a hard floor: below £40,000 it doesn't apply at all. Standard rates apply (which on a sub-£40k property come to £0 anyway).

You're replacing your main residence

The most common exemption. If the new property is replacing your only or main home and you've sold (or are selling on the same day) the old one, you pay standard rates. If you complete on the new home first and sell the old one within three years, you pay the surcharge upfront and reclaim it later (see below).

Mixed-use property

A property that's part residential and part commercial — say a shop with a flat above — is taxed at non-residential SDLT rates (which top out at 5%). HMRC challenges aggressive mixed-use claims, but genuine commercial use of part of the property does qualify.

Six or more dwellings in one transaction

Buying six or more separate dwellings in a single transaction lets you use the non-residential rates. Mainly relevant for larger property investors and developers.

You inherited the property

Inheriting a property isn't an SDLT event. The surcharge only applies when you buy. (But owning an inherited share can affect your status on future purchases.)

The most common scenario: replacing your main home

This trips up nearly everyone moving home in a chain. Picture the timeline:

1. You agree to buy a new house. Your current home is on the market.
2. The chain works out so completion on the new house happens before completion on the old one.
3. At the moment you complete the purchase, you own two homes.
4. HMRC therefore treats the new purchase as an additional property — the 5% surcharge applies, even though everyone agrees the new house is your future main home.
5. Your solicitor pays the surcharge to HMRC as part of completion.
6. A few weeks or months later, the old home sells.
7. You apply to HMRC to reclaim the surcharge. They refund it, usually within a few weeks.

Two practical points: you have to fund the surcharge from cash on completion day (you can't borrow it via your mortgage), and the three-year clock for the old home's sale starts from the new home's effective date.

How to reclaim the surcharge

Once the old main home has sold:

1. Wait for completion of the old home's sale.
2. Within 12 months of that sale (or 12 months of the original SDLT filing date, whichever is later), apply on GOV.UK — search "apply for repayment of higher rates of SDLT".
3. You'll need the SDLT unique transaction reference, completion dates of both transactions, the sale price of the old home, and bank details.
4. HMRC processes most refunds in a few weeks.

Quick numbers with the refund calculator if you want to see how much you'd get back.

Edge cases that catch second-home buyers

Married couples and civil partners

The rules treat you as a single unit. If your spouse owns a flat in their sole name and you buy a house in yours, the house counts as a second home for the household. There's no way to "ringfence" a property in one partner's name to escape the surcharge.

Buying through a limited company

Property bought through a limited company (a popular SPV structure for buy-to-let landlords) attracts the additional-property rates from the first pound — there's no £40,000 floor, no first-time-buyer relief, and no main-residence exemption (companies can't have main residences). Purchases over £500,000 by a non-natural person used for non-qualifying purposes pay a flat 17% rate.

Inherited shares

Inheriting a share of any residential property worth more than £40,000 makes you a part-owner. Buy another property after that and the surcharge applies — even if you've never seen the inherited property and have no plans to. The inheritance itself isn't taxed; future purchases are.

Annexes and granny flats

A property with a self-contained annexe used by a relative is usually treated as a single dwelling for SDLT (Multiple Dwellings Relief, which previously helped here, was withdrawn for transactions completing on or after 1 June 2024). Detailed rules apply — get tax advice if the saving is material.

Replacing your main home from overseas

If you currently live abroad in a home you own and you're buying a new main home in the UK, the rules are technical. You may still be able to treat the UK purchase as a replacement of the overseas main home if the overseas home is sold within three years, but the SDLT manual should be checked carefully and tax advice is sensible.

How second-home buyers can stay efficient

A few practical pointers:

• Time completions carefully. Same-day completion of the old home's sale and the new home's purchase avoids the upfront surcharge entirely.
• Budget for the upfront cost. Even if you'll reclaim, the cash flow matters. A £400,000 replacement-home purchase needs an extra £20,000 in cash on completion day to cover the surcharge.
• Apply for the refund promptly. The 12-month deadline is firm and HMRC won't chase you.
• Document the timeline. Keep clear records of completion dates and your residency at each property — useful if HMRC ever queries the refund.

How the rules changed in October 2024

Before 31 October 2024 the surcharge was 3%, not 5%. That means a historical second-home purchase completed before that date used the old rates. If you're researching a transaction from before October 2024, the rate tables on the SDLT changes timeline show what applied and when.

If you're non-resident as well

The 2% non-resident surcharge stacks on top. A non-resident buying a second home pays standard + 5% + 2% in every band — so a £500,000 property attracts £50,000 of SDLT (an effective rate of 10%). Use the non-resident calculator for combinations of buyer type and residency.

Quick answer table

Situation	Does the surcharge apply?
Second home, no previous property owned	N/A — you're an FTB
Second home, you already own a main home	Yes
Replacing main home, old home sells same day	No
Replacing main home, old home sells later	Yes upfront; reclaim within 3 years
Inherited a share of family home worth > £40k	Yes on next purchase
Property < £40,000	No
Buying via a limited company	Yes (no £40k floor)
Mixed-use property	No — non-residential rates apply

Rates last verified against HMRC: 8 May 2026.