SDLT for Second Homes

What Qualifies as a Second Home?

The SDLT surcharge applies to any residential property purchase that isn't your primary residence. This includes:

• Holiday homes: Properties used for personal leisure, even occasionally
• Buy-to-let investments: Properties purchased to rent out to tenants
• Properties kept vacant: Additional homes that aren't actively used

The surcharge applies regardless of whether the property generates rental income or sits empty.

🏠 Moving to a New Main Residence

If you're simply relocating your primary home, the additional property surcharge generally doesn't apply. Even if you temporarily own two properties during the transition period, you're entitled to pay standard SDLT rates.

💰 Claiming Your SDLT Refund

When purchasing a new main residence before selling your existing one, you'll initially pay the higher SDLT rate. Once your original property sells, you can reclaim the difference.

Refund Process:

1. Complete your new property purchase (paying higher rates)
2. Sell your original main residence within 3 years
3. Submit HMRC form "Apply for repayment of higher rates for additional properties"
4. Claim must be made within 12 months of selling your previous home

📋 How HMRC Defines Your Main Residence

HMRC may request evidence to confirm which property qualifies as your primary home. They typically consider:

Additional factors include the property's furnishing level and correspondence addresses provided to banks, utilities, and other organisations.

💑 Married Couples & Civil Partners

For SDLT purposes, married couples and civil partners are treated as a single unit. This means:

• If either spouse already owns property, any new purchase by either person triggers the surcharge
• Both partners share ownership status, regardless of whose name appears on the deeds

👥 Joint Purchasers & Unmarried Partners

HMRC applies a simple rule for joint purchases: if any joint purchaser already owns additional property, the higher rates apply to the entire transaction.

This means unmarried couples buying together are also treated as a single unit for SDLT purposes.

👨‍👩‍👦 Parents Helping Children Buy

Parents who already own property should be careful when assisting their children with home purchases:

🏢 Limited Company Purchases

The SDLT surcharge applies to properties purchased through limited companies, including:

• Existing property investment companies
• Newly formed companies created specifically for property acquisition
• Buy-to-let portfolios held in company structures

🌍 Overseas Property Ownership

Owning property abroad affects your SDLT liability in England and Northern Ireland:

Holiday Homes Abroad

If you own a property overseas and purchase an additional property in England or Northern Ireland, you'll pay the higher SDLT rate.

UK Expats Returning Home

British nationals living overseas who own property abroad will face the surcharge when buying UK property. This particularly affects expats looking to return to the UK after extended periods overseas.

🏗️ Non-Residential Property

The surcharge only applies to residential property. The following are exempt and don't count towards your property ownership:

• Commercial premises: Shops, offices, warehouses
• Agricultural land: Farms and farmland
• Undeveloped plots: Land without residential structures
• Forestry: Woodland and timber land
• Mobile homes, caravans & houseboats: Not classified as residential property

🏠 Inherited Property

No Stamp Duty is payable when you inherit property. However, subsequent purchases may trigger the surcharge if the inherited property counts as "additional."

🏘️ Annexes

Self-contained annexes (such as granny flats) purchased alongside a main property are generally exempt from the surcharge, provided:

• The annexe is bought at the same time as the main dwelling
• The annexe value is no more than one-third of the total purchase price
• The annexe is located within the grounds of the main property