How to Avoid Stamp Duty on a Second Home

As of this month (April 2025), Stamp Duty Land Tax rates on second homes have risen, starting at an extra 5% for properties up to £125,000. If you are buying a second property as an investment to flip or rent out, paying this higher SDLT will cut into your profits. Here are some ways that you can reduce your tax obligations when you buy a second home and avoid paying more than you need to.

Table of Contents

What is Stamp Duty Land Tax?
How Much is SDLT on Second Homes?
When Do You Need to Pay Stamp Duty on a Second Property?
How to Avoid Paying Stamp Duty on a Second Home

What is Stamp Duty Land Tax?

Stamp Duty Land Tax, or SDLT, is a tax that you pay when buying a property for over £125,000. Stamp duty helps to generate revenue for the government and to document the property sale for legal purposes. If you buy a property in Scotland, you pay Land and Buildings Transaction Tax, and in Wales, you pay Land Transaction Tax. The amount of SDLT you pay depends on the value of the property. Here are the current SDLT rates for buying a property.

Property Price	Stamp Duty Land Tax Rate
Up to £125,000	0%
From £125,001 to £250,000	2%
From £250,001 to £925,000	5%
From £925,001 to £1.5 million	10%
Over £1.5 million	12%

How Much is SDLT on Second Homes?

Here are the current SDLT rates for buying a second property:

Property Price	Stamp Duty Land Tax Rate
Up to £125,000	5%
From £125,001 to £250,000	7%
From £250,001 to £925,000	10%
From £925,001 to £1.5 million	15%
Over £1.5 million	17%

You pay an extra 5% on top of standard SDLT rates when buying a second property. If you buy a second home for £250,000, you will pay 5% on the first £125,000 and 7% on the next £125,000, so you pay a total of £15,000 SDLT on this purchase.

When Do You Need to Pay Stamp Duty on a Second Property?

Once you have completed the sale on your second property, you have 14 days to pay the stamp duty. You need to fill in an SDLT return form on the HMRC website – your solicitor or conveyancer can do this for you and even pay the tax on your behalf and add it to their fees. If they don’t do it for you for some reason, you will have to complete the form and pay the tax yourself. You can face a fine if you do not complete the form and make your payment within 14 days, so communicate with your conveyancer to make sure that one of you is doing it.

FAQ: Can I use my mortgage to pay the stamp duty on my second property?

Yes, you can add the stamp duty costs to your mortgage, although this will increase the amount borrowed and the interest paid on it. If your finances allow, it’s best to pay your stamp duty using funds other than your mortgage.

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How to Avoid Paying Stamp Duty on a Second Home

There are some exemptions that may apply to SDLT on a second home, so it’s worth checking to see if any of them apply to you.

Properties exempt from stamp duty

If a property is worth less than £40,000, you do not need to pay SDLT on it, even if it is your second property. Movable property like caravans, houseboats and mobile homes are exempt from stamp duty, regardless of their value. Also, you can claim back the 5% stamp duty surcharge if you sell your previous main home within 3 years of buying the new one.

Reducing the stamp duty on second homes

There are some ways you can reduce the stamp duty on second homes. Properties that cost more than £500,000 and are purchased by companies rather than individuals have a stamp duty rate of 15%, which is a better rate for some high-value properties. There are other potential tax benefits to buying property through a limited company.

If you are building your own home, SDLT only applies to the cost of the land rather than the property you build on it. Some property developers offer to pay the stamp duty as part of an incentive package for newly built properties, so it’s worth asking developers about this, especially if you are considering buying an off-plan property. You can also negotiate with sellers to pay just under an SDLT bracket to reduce your tax obligations – if a property is on sale for £250,000, you could ask if they would accept £249,000 so you would come under the 7% SDLT second home rate instead of 10%. Zero-carbon homes are exempt from stamp duty if they are worth less than £500,000, and zero-carbon homes worth over £500,000 can get a stamp duty discount of £15,000. The home would need to be demonstrably zero-carbon throughout the year, have a very high standard of insulation, and be powered by renewable energy. Your solicitor or conveyancer can help you claim zero-carbon SDLT relief.

It used to be possible to reduce your SDLT by transferring ownership of a second property to a spouse or partner, or by purchasing several properties from the same seller in linked transactions, but unfortunately, this is no longer the case. There are many ways to potentially reduce the SDLT you pay on a second property even if you can’t avoid paying entirely, so it’s worth looking into. Given the complexities and potential pitfalls, it’s advisable to consult with a tax professional or solicitor experienced in property transactions to ensure you aren’t overpaying in SDLT.

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