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Landlords can use this stamp duty calculator to estimate their stamp duty liability on buy-to-let residential property purchases in England and Northern Ireland.
Important: In the Autumn Budget 2024, the government increased the buy-to-let stamp duty surcharge from 3% to 5% effective from the 31st October 2024.
Stamp Duty Land Tax (SDLT) is a tax you may need to pay when purchasing property in England or Northern Ireland.
SDLT only applies to properties priced above a certain threshold. For residential properties, Stamp Duty is charged on homes costing more than £250,000, unless you are eligible for first-time buyer relief.
First-time buyers benefit from an exemption on properties priced up to £425,000 and pay a reduced rate for homes costing up to £625,000.
Buy-to-let Stamp Duty refers to Stamp Duty Land Tax (SDLT) when purchasing a property for rental purposes. There is a 5% surcharge on top of the standard SDLT rates if your buy-to-let purchase results in owning more than one property.
Note: If you're buying property in Scotland or Wales, different taxes apply—Land and Buildings Transaction Tax (LBTT) in Scotland, and Land Transaction Tax (LTT) in Wales.
Buy-to-Let Stamp Duty can make purchasing rental properties more expensive if you already own other properties, due to the 5% surcharge. However, if it’s your only property, you’ll only pay standard rates.
Here’s breakdown of Stamp Duty Land Tax (SDLT) rates for primary residences, buy-to-let/secondary homes (with an additional 5% surcharge), and non-UK residents (with an additional 2% surcharge).
Stamp Duty Land Tax (SDLT) is calculated based on the price of the property and is divided into different price bands, with each portion of the price being taxed at a specific rate. The amount you pay depends on whether the property is your primary residence, an additional property (buy-to-let or second home), or if you're a non-UK resident.
How to Calculate SDLT
1) Identify the Property Price
Find the total value of the property you're buying.
2) Apply the Tax Bands
Each portion of the property price is taxed according to the SDLT rates for its price range. The rates for residential properties are outlined in the table above.
Let’s say you're buying a second home (buy-to-let) for £600,000. The SDLT calculation would be as follows:
First £250,000: 0% (primary residence) + 5% (buy-to-let surcharge) = 5% of £250,000 = £12,500
Next £350,000 (from £250,001 to £600,000): 5% (primary residence) + 5% (buy-to-let surcharge) = 8% of £350,000 = £35,000
Total SDLT: £12,500 (first portion) + £35,000 (second portion) = £47,500 SDLT due.
Explanation
The first £250,000 is taxed at 5% (buy-to-let surcharge), while the portion from £250,001 to £600,000 is taxed at 10% (standard 5% rate plus 5% surcharge for buy-to-let properties).
The total SDLT is the sum of both portions, resulting in £47,500. This method ensures that the tax is calculated progressively, with different rates applied to different portions of the property price.
To calculate how much stamp duty you will pay using the buy-to-let stamp duty calculator above:
1) Enter the property purchase price.
2) Select whether it’s a primary residence, secondary property, or if you’re a first time buyer from the drop down.
3) Select whether you are a UK resident or not.
4) Click the "Calculate" button for your result.
Certain transactions qualify for SDLT reliefs, which can reduce the amount of tax payable or eliminate it entirely. To claim relief, buyers must submit a Stamp Duty Land Tax return, even if no tax is owed. Here's a summary of key reliefs:
First-Time Buyers’ Relief: Available if you and anyone you're buying with are first-time buyers, intend to occupy the property as your main residence, and the purchase price is £625,000 or less. Relief provides:
0% SDLT on the first £425,000
5% on the remaining portion up to £625,000
Relief is unavailable if the purchase price exceeds £625,000.
Multiple Dwellings Relief (MDR): Abolished for transactions completing after June 1, 2024, but available for qualifying transactions before then. Multiple Dwellings Relief allows the SDLT to be calculated based on the average value of dwellings purchased, with a minimum rate of 1%.
Building Company Buying an Individual’s Home: Relief applies if a building company buys a home from an individual purchasing a new home from them. The property must have been the seller’s main residence at some point in the past two years, and the new home must become the seller's main residence.
Employer Buys an Employee’s Home: If an employer buys a house due to an employee’s job relocation, the transaction may be exempt from SDLT, provided certain conditions are met.
Compulsory Purchases: Local authorities or other legal bodies making compulsory purchases may be eligible for SDLT relief.
Planning Obligations Relief: Developers can claim relief when transferring property to a local authority as part of a planning obligation (e.g., providing community amenities like a school).
Charities Relief: Charities purchasing property for charitable purposes can claim partial or full relief from SDLT. The relief can be withdrawn if the property is used for non-charitable purposes within three years.
Right to Buy Properties: SDLT is calculated on the discounted price paid in a Right to Buy transaction.
Registered Providers of Social Housing: Eligible providers can claim SDLT relief if the property is purchased with public funding or under certain other conditions.
Crown Employees: Crown employees posted abroad and their spouses/civil partners may be exempt from the 2% non-resident SDLT surcharge when buying property in the UK.
Freeport Tax Sites: Relief applies to purchases of land or property in designated Freeport tax sites, provided they will be used in a qualifying way.
Additional, less common reliefs, such as for property reconstructions or acquisitions, may also be available in specific situations.
You pay SDLT to HM Revenue and Customs (HMRC). You’ll need to send an SDLT return to HMRC and pay the tax within 14 days of completion. The process typically works like this:
Your solicitor or conveyancer will file an SDLT return on your behalf after the property purchase is completed. They will also arrange payment to HMRC. Even if no SDLT is owed, a return still needs to be filed.
If they do not do this for you, you can file a return and pay the tax yourself.
Yes, if one spouse owns a property individually and later decides to purchase a second home jointly with their spouse or partner, a higher tax rate applies. For stamp duty purposes, married couples and civil partners are treated as a single entity.
When you're simply moving homes, additional property stamp duty rates typically do not apply. However, if you find yourself temporarily owning two properties—perhaps due to delays in selling your previous home—you may incur additional property stamp duty surcharges.
If you encounter such delays, as long as you sell your old home within three years of purchasing your new property, you can claim a refund on the additional property stamp duty surcharge. To qualify for this refund, you must submit your application within 12 months of selling your previous home. More information on how to apply, along with the necessary forms, can be found on the official HMRC website.
Initially, buy-to-let stamp duty does not apply to properties you inherit. However, if you purchase another home before selling the inherited property (similar to situations where there are delays in selling your previous home), you may be liable for the buy-to-let stamp duty surcharge on the new home.
If you inherit less than a 50% share in a property and then buy another one within 36 months, this will not be considered an additional property, and thus BTL stamp duty will not apply.
Certain exemptions apply to buy-to-let stamp duty, including:
● If the property price is below £40,000.
● If you are purchasing a caravan, houseboat, or mobile home.
● If you are constructing your own home.
● For zero-carbon homes costing over £500,000.
