SDLT Surcharge on Second Homes
The Stamp Duty Land Tax (SDLT) surcharge for purchasing a second residential property in the UK is 3% on top of standard rates.
When purchasing an additional residential property in the UK, such as a buy-to-let investment or a holiday home, buyers are subject to an additional Stamp Duty Land Tax (SDLT) surcharge. Currently, this surcharge is set at 3% above the standard SDLT rates.
This means that even if a property falls into the 0% standard rate band, the 3% surcharge still applies to the entire purchase price. For property investors, this represents a significant upfront cost that must be factored into yield calculations and return on investment (ROI) models.
Why was it introduced?
The surcharge was introduced in 2016 as a measure to cool the buy-to-let market and free up housing stock for first-time buyers. However, many professional landlords have adapted by incorporating and purchasing through Special Purpose Vehicles (SPVs) to mitigate other tax changes, though the 3% SDLT surcharge still applies to corporate purchases of residential property.