The last twenty five years has seen enormous growth in the UK’s housing market. Part of the driving force behind the growth in this sector has been the increased demand, partially driven by a growing ‘buy to let’ sector.
With supply lagging far beyond demand from an increasing population, the UK Government have been keen to discourage the small private buy to let investor. From 1. April 2016, anyone purchasing an additional buy to let property must pay at least an extra 3 per cent in stamp duty land tax.
The Treasury has tried to close any loopholes to get around extra stamp duty charges. The changes apply to companies and individuals no matter how many properties you are purchasing.
Stamp Duty Land Tax Surplus for Buy to Let Landlords
| Property Price | Surplus SDLT Rate |
| Up to £40,000 | 0% |
| Over £40,000 and under £125,000 | 3% |
| Over £125,000 and under £250,000 | 5% |
| Over £250,000 and under £925,000 | 8% |
| Over £925,000 and under £1,500,000 | 13% |
| Over £1,500,000 | 15% |
For example, prior to April 2016, anyone buying a £200,000 second home or buy to let, paid stamp duty of £1,500. This was based on paying zero per cent on the first £125,000 of the property value and 2 per cent on the portion between £125,001 and £250,000.
From April 2016, landlords had to pay 3 per cent for the first £125,000 and 5 per cent instead of 2 per cent on the amount between £125,001 and £250,000. This could give them a total bill of up to £7,500.
Click here for non Buy to Let Stamp Duty Rates.
However, it’s not just buy to let landlords who have been hit but anyone buying a second home. This even extends to parents buying a property for their children, or a couple purchasing a home together where one is already a homeowner.
Those purchasing a buy-to-let and second homes face the charge, but so do others.
Anyone owning a second property that isn't their main residence and buying another, or replacing the one they don't live in, is also likely to get caught up in the extra tax.
There are a variety of SDLT calculators on the internet.
Related Articles:
Download our Free First Time Buyers Guide
Recent posts
Many households are still being affected by the high cost of living, with several people worrying about how they can make ends meet on a monthly-basis. Unfortunately, the cost of bills including, water, council tax, and energy are still rising. Here are some things you can do.
The Renters’ Rights Bill represents a significant milestone designed to enhance the rights and protections of tenants in the rental market. This comprehensive bill aims to foster a more balanced and fair rental sector, ensuring that tenants can enjoy greater security and equitable treatment. It is likely to become law in late 2025.
Limited Company vs Single Name Buy to Let
14 days ago
Owning a buy-to-let property in your sole name versus through a limited company each has its own set of advantages and disadvantages.
Top 10 property price hotspots in 2024
20 days ago
Data from Rightmove shows that Sunbury-on-Thames in Surrey was the number one house price hotspot in 2024. The prices in this area climbed an impressive 12.5% - increasing from an average price of £527,005 in 2023 to £592,926 in 2024.
Buy to Let Stamp Duty Changes April 2025
23 days ago
On the 31st October 2024 stamp duty for those purchasing additional properties increased by 2% from 3% to 5%.
From 1st April 2025 the threshold will be reducing from £250,000 to £125,000
Where did Londoners move to in 2024?
28 days ago
Research from Metro shows that those who chose to move home didn’t actually move that far away. With a 430g pack of chicken costing on average almost double in London than the rest of the UK, it's no wonder some people are choosing a change of scenery to save a few pennies.
Reasons to get a Buy to Let Mortgage
20 Jan 2025
Following recent changes in the Buy to Let market, some investors may find this product less appealing. However, if done correctly, building a buy to let portfolio can be very profitable.
Stamp duty: how is it changing in 2025?
7 Jan 2025
Helping you understand the upcoming changes in stamp duty (SDLT) from April 2025.
More information
Trusted by
