These rates generally apply where, at the end of the day of completion, the property will not be your only residential property worth £40,000 or more anywhere in the world and you have not disposed of your previous main residence. The higher rates are the standard residential rates plus a 5-percentage point surcharge.
This means the Stamp Duty Land Tax cost of a second home is often much higher than buyers expect. The surcharge applies whether the additional property is a buy to let, a holiday home, or even a new home bought before the old one has been sold. The rules discussed here apply to England and Northern Ireland. Scotland and Wales have their own separate property tax regimes.
Why Second Homes Attract Higher SDLT Rate
The additional dwelling surcharge was first introduced in April 2016 at a rate of 3%, with the aim of cooling demand from investors and second home buyers who were competing with first-time buyers and pricing them out of the market. In the Autumn Budget of October 2024, the surcharge increased from 3% to 5% with immediate effect from 31 October 2024. This increase represented a 67% jump in the surcharge rate and was the most significant change to additional property taxation in nearly a decade.
Alongside the surcharge increase, the standard SDLT thresholds reverted on 1 April 2025 to the levels that had been in place before the temporary relief introduced in September 2022. The nil-rate band fell from £250,000 back to £125,000, meaning that more of the purchase price is now exposed to tax even before the surcharge is applied. For buyers of additional dwellings, these two changes together have produced a compound increase in acquisition costs that makes accurate budgeting essential.
The UK Stamp Duty Second Homes Rates 2026
The SDLT rates for additional dwellings in 2026 are calculated by adding 5 percentage points to each standard residential rate band. The tax is progressive, meaning each rate applies only to the portion of the purchase price falling within that band, not to the entire price. The bands and rates currently in force are as follows.
Purchase price band | Standard residential SDLT rate | SDLT rate on a second home |
|---|---|---|
Up to £125,000 | 0% | 5% |
£125,000 to £250,000 | 2% | 7% |
£250,001 to £925,000 | 5% | 10% |
£925,001 to £1.5 million | 10% | 15% |
Above £1.5 million | 12% | 17% |
Example 1:
Consider Margaux who in April 2026 is purchasing a second property in Oxfordshire, England for a purchase price of £500,000. The total SDLT payable on this purchase is therefore £40,000. By comparison, a standard home mover buying the same property at £500,000 would pay just £15,000 in SDLT.
The Non-Resident Surcharge: An Additional Layer
Buyers who are not UK resident face a further 2% surcharge on top of all applicable residential rates, including the additional dwelling surcharge. For SDLT purposes, a non-UK resident is someone who has not been present in the UK for at least 183 days in any continuous 365-day period falling within the window that begins 364 days before the purchase and ends 365 days after it.
This 2% surcharge applies to the entire purchase price and stacks with the 5% additional dwelling surcharge, meaning that a non-resident buying a second home could face a combined surcharge of 7 percentage points above the standard rates.
Example 2: Consider the same facts as in Example 1, except that Margaux is non-UK resident for SDLT purposes. The total SDLT payable on the purchase would therefore be £50,000.
Can the Surcharge Be Reduced or Avoided?
The legislative framework does provide a number of legitimate reliefs and exemptions that can reduce or, in certain circumstances, eliminate the higher rate charge. The most significant of these is the replacement of main residence relief, which allows buyers who sell their previous main home within 36 months of the new purchase to claim a full refund of the surcharge element. Other reliefs may be available depending on the buyer's personal circumstances, details of which can be found here.
Conclusion
The 5% surcharge on second homes is now a fixed feature of the SDLT landscape, and there is no indication that the government intends to reduce it. For anyone budgeting for an additional property purchase in 2026, the surcharge should be treated as a core acquisition cost alongside legal fees, survey costs, and mortgage arrangement fees. The most effective way to manage the cost is through early planning. Speak to a specialist tax adviser before agreeing heads of terms on any additional property purchase.
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