Stamp duty on a second home: the 5% surcharge explained
Buying a second property costs an extra 5% in Stamp Duty on top of the normal rates - but the main-residence replacement rule and the refund system save most movers. The full guide.
2 min read · Updated 7 August 2026 · By Dwellmark Editorial
If you buy a residential property while already owning another one, you usually pay an extra 5% surcharge on top of the normal Stamp Duty rates - on every band, including the nil-rate portion. On a £300,000 second home, that’s £15,000 you wouldn’t pay on your only home. But there are two big exceptions that save most people: the replacement rule and the refund system.
Who pays the surcharge
- You pay it if, after buying, you own two or more residential properties worth over £40,000 each - anywhere in the world
- Joint buyers count as a group: if either of you owns another property, the group pays
- It applies to the whole price, on top of the standard bands (0/2/5/10/12%)
- Companies and trusts buying residential property pay even higher rates (up to 15% from April 2025)
The replacement rule (most movers are safe)
You do not pay the surcharge if the property you’re buying replaces your main residence. The rule: your previous main home must be sold within 36 months of completing the new purchase. If you sell it first, no surcharge at all. If you buy first and sell later, you pay the surcharge upfront - then claim it back once the old home sells.
Worked examples
| Scenario | Price | Surcharge |
|---|---|---|
| Second home (no sale) | £300,000 | £15,000 (5% of full price) |
| Buying new main home, old one already sold | £300,000 | £0 - replacement rule |
| Buying new main home, old one sells 5 months later | £300,000 | £15,000 upfront → refunded |
| Buy-to-let via a company | £300,000 | £45,000+ (higher company rates) |
What counts as “owning a property”
- Any residential property worth over £40,000 - including inherited homes, even if you’ve never lived in them
- Properties abroad count too - the surcharge is based on worldwide ownership
- Mobile homes and caravans don’t count; houseboats can count (worth over £40,000)
- If your old home is unsold on completion day, you pay the surcharge - the refund system is the escape hatch, not an exemption
The surcharge is the single most-common Stamp Duty surprise for movers. If you’re buying before selling, budget for it and plan the refund - and tell your conveyancer your exact situation at the start, not at completion.
Source: GOV.UK - Stamp Duty Land Tax: higher rates — Surcharge and refund rules checked August 2026
Stamp Duty calculatorTick “second home” and see your exact bill.Full Stamp Duty rates guideThe standard bands and first-time buyer relief.
Sources
- GOV.UK - Stamp Duty Land Tax: higher rates — Surcharge and refund rules checked August 2026
Keep reading
Stamp duty refunds: when and how to claim
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Devolved property taxes: LBTT (Scotland) and LTT (Wales) explained
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Stamp duty for first-time buyers: the full 2026 guide
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Stamp Duty Land Tax 2026: rates, thresholds and calculator
What you’ll actually pay in Stamp Duty in 2026 - current rates for every price band, first-time buyer relief, the 5% surcharge for second homes, and how to calculate your bill in under a minute.