In this brief guide, we are going to discuss the statement: “stamp duty second home”.

Stamp duty on a second home

The stamp duty on a second home will be 3% on the existing rate of stamp duty you pay in each band. If you buy a property under £40,000then it will not be subject to stamp duty on a second home.

Stamp duty second home table

Property valueStamp duty rate on second homes
Up to £125,0003%
£125,001 to £250,0005%
£250,001 to £925,0008%
£925,001 to £1.5 million13%
Anything above £1.5 million15%

There are some exemptions to paying stamp duty on a second home but you should speak with a tax advisor about these.

There is no stamp duty to pay if you have inherited the propety

Exceptions for married couples

“ For the purpose of property ownership, married couples and civil partnerships are seen as one unit. This means that if one person already owns a property, any subsequent residential purchase by either person will be seen as an additional property for both individuals.

Married couples living separately, who are separated in circumstances that are likely to be permanent, will now be treated individually and not as one unit. “

Other exemptions

If you are buying a caravan, mobile home or houseboat then you won’t have to pay the additional rate stamp duty regardless of how much you are paying for them.

What is stamp duty?

In the UK we pay stamp duty for any property which we purchase over a certain price point. The stamp duty rate is set by HM treasury and you usually have to pay the stamp duty on the home within 14 days of completing the house purchase. If you don’t you may be charged interest and have to pay penalties. There is now stamp duty relief for first-time buyers which reduces the amount of stamp duty they pay if the home is below £500,000. The tax you pay in Scotland or Wales is different. 

The stamp duty threshold is £125,000for residential properties and £150,000 for non-residential properties.

Your conveyancer will usually handle the payment of stamp duty to HM treasury and will be responsible for getting you the stamp duty certificate as proof that you have paid stamp duty.

You can also file a stamp duty return and pay the tax yourself.

The stamp duty rates you pay if you are buying your first home:

If you are buying your first home and it is under £500,000 you won’t have to pay stamp duty up till £300,000 but you will have to pay 5% on the amount between £300,001 and £500,000.

The stamp duty rates if you have bought a home before:

If you have bought a home before and are buying a residential home again but don’t currently own any other homes(hence this will not be your second home) then below are the stamp duty rates you will pay:

Property valueStamp duty rate
Up to £125,0000%
£125,001 to £250,0002%
£250,001 to £925,0005%
£925,001 to £1.5 million10%
Anything above £1.5 million12%

If you were buying a leasehold home with a normal sale or if it was a transfer then these are the rates you will need to pay.

However, if the total rent over the life the lease (the ‘net present value’) is more than £125,000, you will also pay Stamp duty of 1% on the portion over £125,000 – unless you buy an existing (‘assigned’) lease.

The stamp duty rates you pay if you are buying your second home:

The stamp duty rates you pay on a second home are 3% on top of the current stamp duty rates. You will of course not qualify for any stamp duty first-time buyer relief by default as you are buying a second home.

Property valueStamp duty rate on a second home
Up to £125,0003%
£125,001 to £250,0005%
£250,001 to £925,0008%
£925,001 to £1.5 million13%
Anything above £1.5 million15%

If you are buying a second home to replace your current home then you will not need to pay any stamp duty on the second home but this is only if you have already sold your first home.

If you still have your first home then you will have to pay stamp duty on the second home at the additional rate of 3%.

If you end up selling your first home within 36 months then you may be able to reclaim the stamp duty you paid on the second home. You will be able to claim the refund within three months of the sale of your first home or within 12 months of the filing date of your stamp duty  tax return, whichever comes later.

If you have more than one home then HMRC will use the below to determine which one is your main residence.

“If you are married, where does the family spend the most time?

If you have children, where do they go to school?

Where are you registered to vote?

Where are you registered with a doctor/dentist?”

Example of the stamp duty on a second home:

If you are buying a second home worth £600,000 then the stamp duty payable will be as follows

Property valueStamp duty rate on a second homeStamp duty on £600k for a second home(residential)
Up to £125,0003%£3750
£125,001 to £250,0005%£6,250
£250,001 to £925,0008%£17,500
£925,001 to £1.5 million13%
Anything above £1.5 million15%


Total = £27,500

Stamp duty on a second buy to let home:

The stamp duty rates you will pay on a second buy to let home are different than what you may pay on a residential home because the stamp duty bands are different. You will still need to pay the 3% additional rate on second or additional homes.

Buy to let stamp duty table (second homes included)

Property valueStamp duty rate on a first homeStamp duty on a second home
Up to £150,0000%+3%
£150,001 to £250,0002%+3%
Anything above £250,0005%+3%

If you buy a buy to let leasehold property you will have to pay stamp duty on both the purchase price and the value of rent you pay(the net present value).

You will have to calculate these separately then add them together. If you buy an existing lease you will only pay stamp duty on the lease price.

The Net present value is the total rent over the lifetime of the lease. If this is below £150,00 then you won’t have to pay any stamp duty.

The net present value of rentStamp duty rateSecond-home stamp duty 
£0 to £150,0000%+3%
£150,001 to £5,000,0001%+3%
Anything above £5,000,0002%+3%

Stamp duty second home calculator

If you want to see what stump duty on a second home will be you can use a stamp duty second home calculator to see what your stamp duty liability will be on a second home.

FAQs: Stamp duty second home

Below are some of the most frequently asked questions about stamp duty on second homes.

What is considered to be a second home?

A second home is any other home you buy other than your residential home.

Do you pay stamp duty on second home?

Yes, you will have to pay stamp duty on your second home at the additional rate of 3%. You won’t have to pay any stamp duty if the home ie less than £40,000.

When should you pay stamp duty on a second home?

You must pay stamp duty on a second home within 24 days of completing the purchase.

Getting a mortgage for a second home

You may want to consider using an independent mortgage broker to get a mortgage for a second home.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases. This could be over 11,000 mortgage products. This may have some advantages than going directly to a mortgage lender.

A second home mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your remortgage is indeed a possibility before you make a full mortgage application. Once you have found a home you want to buy or are satisfied with the mortgage offer for your remortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer. Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it, they will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.

In this brief guide, we discussed the statement: “stamp duty second home”. If you have any questions or comments please let us know.

John Bate

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.