If you’re considering buying a second home in 2025—whether as a holiday retreat, a buy-to-let investment, or a place for family—you’ll need to factor in Stamp Duty Land Tax (SDLT) as a key cost.
Stamp duty on second homes is significantly higher than for main residences. With the additional rate still in place, the difference can be thousands of pounds.
In this blog, we’ll break down what you can expect to pay, how the rules work, and the factors that could impact your final bill.
Let’s take a closer look at second home stamp duty in 2025—and what it means for your property plans.
What counts as a second home?
A second home is any additional residential property you own alongside your main residence. It could be a:
- Holiday home
- Buy-to-let property
- Property for a family member
- Flat for weekday use if you work away from home
Even if you don’t live there regularly, HMRC will still classify it as a second home if you already own a primary residence.
How much Stamp Duty will you pay in 2025?
As of 2025, the standard stamp duty rates still apply, but with a 3% surcharge on top of each band for second homes and additional properties.
Here’s how the current rate bands break down:
| Portion of Property Price | Standard SDLT Rate | Second Home Rate (with 3% surcharge) |
| Up to £250,000 | 0% | 3% |
| £250,001 to £925,000 | 5% | 8% |
| £925,001 to £1.5 million | 10% | 13% |
| Above £1.5 million | 12% | 15% |
Example:
If you’re buying a second property worth £400,000, you’ll pay:
- 3% on the first £250,000 = £7,500
- 8% on the remaining £150,000 = £12,000
- Total SDLT = £19,500
Compare that with £7,500 in stamp duty if this were your only property. The surcharge makes a big difference.
Who has to pay the surcharge?
- You will need to pay the 3% surcharge if:
- You already own another residential property anywhere in the world
- You’re not replacing your main residence
- You are buying a property worth £40,000 or more
- Even if your name is already on another property—even jointly—you’ll be liable for the higher rate.
Are there any exemptions?
- Yes, but they’re limited.
You might avoid the surcharge if:
You sell your main home and buy a new one, even if the second property is bought before your sale completes. If the old home is sold within 36 months, you can claim a refund.
- The property is under £40,000. However, this is rare in the current market.
- You’re buying a non-residential or mixed-use property. These are taxed differently.
- A divorce or separation settlement results in buying out a share in a former home.
What if you’re buying as a couple?
This can be tricky. If you’re buying with a partner and either of you already owns a property, the surcharge applies to the whole transaction—even if one of you is a first-time buyer.
It’s treated as a joint purchase, and ownership of a previous property by either party means the higher rate applies.
Holiday lets and investment properties
Many buyers purchase second homes as holiday lets or buy-to-let investments.
Even though these serve different purposes, they’re still classified as second homes under stamp duty rules. This means you’ll pay the 3% surcharge in full, regardless of the property’s use.
However, holiday lets may qualify for business rates relief if operated commercially, but that’s separate from SDLT.
Timing your purchase can save money
If you’re in the process of selling your current home and buying a new one, the order of events matters.
Buy the second property before your current home is sold, and the surcharge applies. But if you sell first, then buy, you’re usually exempt (as long as it’s a replacement of your main residence).
Even if the sale comes after the purchase, you can apply for a stamp duty refund within 12 months of selling your old home.
This can be helpful if there are delays in the property chain but you still want to move ahead with your new purchase.
The role of an online Stamp Duty calculator
To avoid surprises, it’s wise to use an online stamp duty calculator before making any decisions. These tools quickly show how much you’ll owe based on:
- Property price
- Your residential status
- Whether the property is a second home
It helps you budget better and understand the real cost of the purchase. It’s especially useful when negotiating a purchase price or comparing properties just under and just over key thresholds.
Buying through a Limited Company
Some landlords choose to buy second homes through a limited company. This is common for those building a property portfolio.
Keep in mind:
- The 3% surcharge still applies
- Companies buying homes over £500,000 may pay a flat 15% SDLT rate unless they qualify for relief
- Tax benefits (like deductible mortgage interest) may balance some of the upfront costs
- Speak with a property tax adviser if you’re exploring this route.
Can you avoid second home Stamp Duty?
There are very few legitimate ways to avoid second home SDLT altogether. Most involve special circumstances like:
- Inheriting property (not always exempt but treated differently)
- Divorce or court-ordered transfers
- Gifting to a spouse or civil partner
Beware of any schemes that promise to avoid stamp duty completely—they are often risky, scrutinised by HMRC, and can result in penalties.
Final thoughts
Buying a second home in 2025 can be a smart move—whether you’re investing, planning for the future, or seeking a lifestyle upgrade. But it’s essential to factor in stamp duty costs upfront, especially with the 3% surcharge in play.
The tax can significantly affect your overall budget and should not be an afterthought.
Use an online stamp duty calculator to see how much you’ll owe based on your situation. Speak with a solicitor or tax adviser before committing to anything complex.
And finally, work closely with experienced estate agents who understand the second home market. They can guide you through the buying process, help you avoid costly mistakes, and ensure you’re fully informed at every step.
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