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.
On this page
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 (top rate 15% on residential purchases over £500,000)
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 Land Tax reference 2026: rates, reliefs and examples
Stamp Duty Land Tax (SDLT) rules can change, so this reference is dated and lists the rates, thresholds and reliefs verified against GOV.UK in August 2026.
Stamp duty on shared ownership: the rules explained
Shared ownership has its own SDLT rules, and the amount due can depend on how you choose to pay and when you buy extra shares. The rules, verified against HMRC guidance, cover approved qualifying bodies, the market value election and first-time buyer relief.
Stamp duty refunds: when and how to claim
Stamp Duty Land Tax refunds can apply in a limited set of situations, including some higher-rates purchases, some residency surcharge cases,
Devolved property taxes: LBTT (Scotland) and LTT (Wales) explained
LBTT and LTT are devolved taxes that replace SDLT in Scotland and Wales respectively.