Stamp duty land tax (SDLT) is a tax you have to pay when buying property or land over a certain price in England and Northern Ireland.
The rates you pay differ depending on the value of the property, as well as what it is going to be used for.
But the rules are slightly different for additional homeowners, meaning landlords can face an extra tax burden on their buy-to-let properties.
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Here’s everything you need to know, and how land tax is applied on BTL in Wales and Scotland.
How much is stamp duty on a buy-to-let property?
There are different property tax rules and rates in different parts of the UK.
How much stamp duty do you pay on a buy-to-let in England and Northern Ireland?
Stamp duty on a BTL property is higher if you already own a home as you need to pay a surcharge known as the 'Higher Rates on Additional Dwellings'.
This means you pay 5% above the standard stamp duty rate, though you won't pay the extra 5% if you only own one property. The surcharge was first introduced in 2016 at the level of 3% and was increased to 5% in October 2024 by chancellor Rachel Reeves.
Below are the current rates of stamp duty:
Property or lease premium or transfer value | Stamp duty rate (not including the second home surcharge) |
|---|---|
Up to £125,000 | 0% |
The portion from £125,001 to £250,000 | 2% |
The portion from £250,001 to £925,000 | 5% |
The portion from £925,001 to £1.5 million | 10% |
The portion above £1.5 million | 12% |
Credit: Gov.uk
While standard stamp duty rates are tiered, the 5% surcharge on buy-to-lets is applied to the whole purchase price of the property.
As an example, if you are buying a second home with a purchase price of £300,000, you would pay £20,000 in stamp duty.
You would pay 5% on the first £125,000 (£6,250), 7% above £125,000 and up to £250,000 (£8,750) and 10% on the final £50,000 (£5,000).
Below are the current stamp duty rates for second homes:
Minimum property purchase price | Stamp duty rate | Row 0 - Cell 2 |
Up to £125,000 | 5% | Row 1 - Cell 2 |
£125,001 to £250,000 | 7% | Row 2 - Cell 2 |
£250,001 to £925,000 | 10% | Row 3 - Cell 2 |
£925,001 to £1.5 million | 15% | Row 4 - Cell 2 |
Over £1.5 million | 17% | Row 5 - Cell 2 |
Credit: Gov.uk
How much stamp duty do you pay on a buy-to-let in Wales?
In Wales, stamp duty was replaced by land transaction tax (LTT) in 2018. If you are buying a property and you already own one or more residential properties, then you must pay the higher rate of LTT.
You pay the lower rate of LLT if you are buying a home and it is your main residence. These rates are:
Minimum property purchase price | LTT rate | Row 0 - Cell 2 |
Up to £225,000 | 0% | Row 1 - Cell 2 |
£225,001 to £400,000 | 6% | Row 2 - Cell 2 |
£400,001 to £750,000 | 7.5% | Row 3 - Cell 2 |
£750,001 to £1.5 million | 10% | Row 4 - Cell 2 |
Over £1.5 million | 12% | Row 5 - Cell 2 |
Credit: Gov.wales
These are the higher LTT rates you’ll pay if you’re buying a second home:
Minimum property purchase price | Higher LTT rate |
Up to and including £180,000 | 5% |
£180,001 to £250,000 | 8.50% |
£250,001 to £400,000 | 10% |
£400,001 to £750,000 | 12.50% |
£750,001 to £1.5 million | 15% |
Over £1.5 million | 17% |
Credit: Gov.wales
As an example, on a second home bought in Wales for £350,000, you would pay £24,950 in LTT. This is because the first portion, up to £180,000, incurs a £9,000 tax bill. £5,950 applies to the portion between £180,000 and £250,000, and £10,000 is incurred on the portion from £250,000 to £350,000.
How much is stamp duty on a buy-to-let in Scotland?
Land and buildings transaction tax (LBTT) replaced UK stamp duty in Scotland from April 2015 and is charged on properties worth more than £145,000.
The portion between £145,001 and £250,000 is taxed at 2%, between £250,001 and £325,000 is taxed at 5%, the portion between £325,001 and £750,000 is charged at 10% and anything over that is taxed at 12%.
For landlords, Scotland has its own surcharge called an additional dwelling supplement (ADS), which is charged on top of LBTT when a buy-to-let (or second) property is purchased.
In Scotland, the ADS is charged at 8% on the whole purchase price of the property.
As an example, on a £300,000 second home, you would pay a total of £28,600 in LBTT. You’d pay £4,600 in LBTT and £24,000 on the ADS.
Can I claim back stamp duty on buy-to-let property?
If the property remains a buy-to-let then the stamp duty is due and you are not eligible for a refund.
If you sell your main residence or second home within three years of buying the buy-to-let home, and now reside in that buy-to-let property, you could be eligible for a stamp duty refund of the surcharge you paid.
You can get help on this from an accountant.
In Wales, you can claim back LTT paid at the higher rate if you sold your main residence within three years of buying the second property.
In Scotland, you can claim a refund of the ADS if you meet three criteria: you sold your previous property within 36 months of buying the second one, the property that was sold was your main residence in the 36 month period and you have lived in the property you paid ADS on as your main residence.
Are any properties exempt from buy-to-let surcharges?
In England and Wales, if you inherit or are gifted a buy-to-let property then stamp duty doesn’t apply.
Surcharges are charged on all buy-to-let property purchases, though no stamp duty is payable on caravans, houseboats or mobile homes.
In Wales, the higher rate of LTT doesn’t apply if you start using a second home as your main residence and have sold the last main home before buying the second one.
You also pay no LTT on a second property worth less than £40,000 or if it’s a caravan, houseboat or mobile home.
In Scotland, inherited or gifted second homes don’t have to pay the ADS, nor do second homes bought for less than £40,000.
Do first-time buyers have to pay additional stamp duty for a buy-to-let?
As long as you've never owned a property before and are purchasing a buy-to-let home, you won't have to pay the additional dwellings extra stamp duty rate. Instead you will pay standard home buyer rates.
However, since you’re purchasing a buy-to-let, you won't qualify for first-time buyer stamp duty relief, which only applies if you intend to live in the property. This relief means first-time buyers in England and Northern Ireland pay no stamp duty on property purchases up to £300,000.
In Scotland, first-time buyers benefit from no LBTT on properties up to £175,000, but only if you intend on living in the property. So, if you bought a home for a BTL, you wouldn’t get this relief. No ADS would be owed on the property as it only applies if you own more than one dwelling.
In Wales, a first-time buyer would not pay the higher rate of LTT on a buy-to-let as it would be their sole property.
When do you need to pay stamp duty?
HMRC rules for England and Northern Ireland state that stamp duty must be paid within 14 days of your property or land purchase to avoid any extra charges and interest.
In Wales you pay the Welsh Revenue Authority within 30 days of the completion of the purchase. And in Scotland you have 30 days after buying your property to submit a Land and Buildings Transaction Tax return and pay any tax due.
Usually buyers – in any region – will pay the money to a conveyancing solicitor in advance of the completion date who will take care of the payment to the relevant body. There will be penalties for paying late.
Do limited companies pay stamp duty on buy-to-let?
There are no stamp duty exemptions for those purchasing a buy-to-let property via a limited company. The buy-to-let surcharge still applies.
In Wales, you have to pay the higher rate of LTT if you own a limited company. In Scotland, limited companies have to pay ADS.
Can a mortgage help cover stamp duty costs?
It is possible to add stamp duty to your mortgage, though this may vary between lenders.
If you take this route, it's important to understand that this will incur interest over the duration of the mortgage term and end up costing far more than the original tax bill.
It will also affect your loan-to-value ratio (LTV) which could mean you end up paying higher interest rates for your entire mortgage as, broadly, the higher your LTV, the higher the mortgage rate you pay.
For example, if adding the stamp duty bill takes you from a 75% LTV to an 80% LTV, you could end up with a more expensive mortgage.