How Much Stamp Duty Do Landlords Pay on Buy-to-Let?

What rates do landlords pay in England and Northern Ireland?

Five per cent on top of every standard band. Because the surcharge replaces the nil-rate band rather than sitting behind it, the lowest rate any landlord pays is 5%.

The full band table for additional properties

SDLT is banded like income tax, so each slice of the price is taxed at its own rate. These are the rates published by HMRC for additional residential property, in force since 1 April 2025.

Why the surcharge starts at the first pound

An owner-occupier buying at £120,000 pays nothing. A landlord buying the same house pays £6,000, because the 0% band becomes a 5% band the moment you already own a dwelling.

That catches almost every landlord, since the test is whether you own any other residential property worth £40,000 or more anywhere in the world. The wider SDLT rules on gov.uk also add a 2% surcharge for non-UK residents, which stacks on top and takes the top band to 19%.

The £40,000 floor below which nothing is due

Buy a freehold property for less than £40,000 and the surcharge does not apply at all. Standard rates produce a nil bill at that level too, so no SDLT is payable and no return is needed.

This matters at the very bottom of the market: derelict terraces, garages with a flat above and auction lots in the north east still change hands under £40,000. Budget for unoccupied property cover while a wreck like that is being refurbished, because a standard let policy will not respond to an empty building site.

How much will you pay at £250,000, £400,000 and £750,000?

£15,000, £30,000 and £65,000. The effective rate climbs from 6% to 8.67% across that range, so the tax grows faster than the price does.

Worked example: a £250,000 terrace

The first £125,000 is taxed at 5%, which is £6,250. The next £125,000 is taxed at 7%, which is £8,750.

That gives a total bill of £15,000 on a £250,000 purchase. Under the old 3% surcharge and the temporary £250,000 threshold the same house cost £7,500 in tax.

Worked example: a £400,000 semi

The first two bands produce the same £15,000. The remaining £150,000 falls in the 10% band and adds £15,000.

Total SDLT is £30,000, an effective rate of 7.5%. That is more than most landlords budget for a full refurbishment.

Worked example: a £750,000 conversion

The first £250,000 costs £15,000 as before. The £500,000 above it sits entirely in the 10% band and adds £50,000.

Total SDLT is £65,000, an effective rate of 8.67%. At that price the completion budget also has to carry the first year of landlord buildings insurance, which on a conversion of that size runs to several hundred pounds.

Effective rates across the whole range

The table below shows what the same banded calculation produces at seven price points. Use it to sanity check a solicitor’s completion statement before you sign.

Do limited companies pay more stamp duty than individuals?

Usually the same, occasionally far more. A company pays the 5% surcharged bands like any other additional-property buyer, but a purchase above £500,000 can attract a flat 17% unless a relief applies.

The 17% flat rate above £500,000

HMRC charges 17% on the whole price where certain corporate bodies buy a dwelling for more than £500,000. The guidance for corporate bodies confirms the rate rose from 15% to 17% on 31 October 2024.

On a £600,000 house that is £102,000 of tax rather than the £50,000 the banded rates would produce. The charge is tied to the Annual Tax on Enveloped Dwellings regime, which is why it is often called the ATED-related rate.

How property rental business relief works

A company buying to let almost always claims relief from the flat rate, because the property is used in a qualifying property rental business. It then pays the ordinary surcharged bands, the same as an individual buying a second multi-property portfolio addition.

The relief is not automatic and it is not permanent. Let the property to a connected person, or take it out of the rental business within three years, and HMRC can claw the 17% back.

What this means if you are incorporating

Moving personally owned properties into a company is a sale at market value for SDLT, so the surcharge applies again on every transfer. A portfolio landlord with six houses at £200,000 each would face a fresh tax bill running into five figures.

Incorporation relief and partnership rules can reduce that in narrow circumstances. This is the point at which you stop reading articles and pay an accountant.

Can you still claim multiple dwellings relief?

No. Multiple Dwellings Relief was abolished for transactions completing or substantially performing on or after 1 June 2024, and nothing has replaced it.

What landlords lost when mdr went

MDR let you divide the price by the number of dwellings, calculate the tax on the average and multiply back up. HMRC’s guidance on SDLT reliefs now records it as abolished, and claims are only possible on contracts exchanged before 6 March 2024.

The practical loss falls on anyone buying a house with an annexe or a small converted block. Those purchases are now taxed on the full price at the surcharged bands.

Buying six or more dwellings in one transaction

One route survives. Six or more residential properties bought in a single transaction are treated as non-residential, which means the 0%, 2% and 5% commercial bands apply and the surcharge drops away entirely, so a whole block of flats can be cheaper to buy than three houses.

The six dwellings must be bought in one linked transaction from one seller, not assembled over a year. A licensable HMO counts as a single dwelling for this test, however many bedrooms it has.

Mixed-use property takes the same route

A shop with flats above is mixed use, so the whole purchase is taxed at non-residential rates with no surcharge. The commercial element has to be genuine and in use, not a paddock attached to a farmhouse.

HMRC challenges weak mixed-use claims regularly, and losing one means paying the residential rates plus interest. You will also need commercial property insurance rather than a residential landlord policy on a building like that.

When can you reclaim the surcharge?

Only when the purchase replaced your own main residence and you sell the old home within three years. A property bought purely as an investment never qualifies.

The replacement of main residence rule

If you buy a new home before selling the old one, you pay the surcharge on completion and reclaim it later. Sell or give away the previous main residence within three years and the refund is due.

This is the only meaningful refund route, and it is the one landlords misread most often. HMRC treats a buy-to-let bought alongside a home you keep as a replacement of nothing at all.

The claim deadline you cannot miss

For sales completed on or after 29 October 2018, the claim must reach HMRC within 12 months of whichever is later: the sale of the old main residence, or the filing date of the return on the new one.

Miss it and the money is gone. On a £400,000 purchase that is £20,000 of surcharge left with HMRC because a form went in late.

Where landlords get caught out

Keeping your old home as a rental instead of selling it converts a refundable surcharge into a permanent cost. It also changes your insurance, because the differences between landlord and home insurance are wide enough to void a claim if you do not tell the insurer.

Joint purchases catch people too. If either buyer owns another dwelling, the surcharge applies to the whole price, and married couples are treated as one unit.

What do landlords pay in Scotland and Wales?

Scotland charges LBTT plus an 8% Additional Dwelling Supplement on the entire price. Wales charges its own higher residential rates, which run from 5% to 17%.

Scotland: lbtt plus the additional dwelling supplement

The ADS rose to 8% for transactions on or after 5 December 2024, and Revenue Scotland applies it to the whole consideration rather than band by band. It bites at £40,000 and above, and it is repayable if you sell your previous main residence within 36 months.

Add 8% of the full price to every figure in that table to get the real bill. Scottish short-term letting also carries its own licensing regime, so check Airbnb cover before you buy anything you intend to let by the night.

Wales: land transaction tax higher rates

Wales does not bolt a surcharge onto its main rates. It runs a separate higher residential table, set by the 2024 amendment regulations and applying to transactions with an effective date on or after 11 December 2024.

The Welsh higher rates also start at £40,000, and the same three-year replacement rule applies. Northern Ireland uses SDLT on identical terms to England.

Same property, three different bills

The nation you buy in now moves the tax by tens of thousands of pounds. Scotland is the most expensive at every level, and the gap widens as the price rises.

Can you deduct stamp duty from your rental income?

No. Stamp duty is a capital cost, so it never reduces your income tax bill, but it does cut your Capital Gains Tax when you sell.

Why it is a capital cost, not a running cost

Running costs come off your rental profit each year: letting agent fees, repairs, ground rent and the premium on a landlord insurance policy are all deductible. Acquisition costs are not.

SDLT sits with the legal fees and the survey as part of what the property cost you to buy. A rent guarantee premium paid every year is revenue, so the two are treated in opposite ways.

What it saves you at sale

Stamp duty is added to your base cost when you calculate the gain, which reduces the chargeable profit pound for pound. Residential property gains are taxed at 18% within the basic rate band and 24% above it.

So £15,000 of SDLT on a £250,000 terrace saves a higher-rate landlord £3,600 of CGT eventually. The annual exempt amount is £3,000 for 2026 to 2027, which absorbs very little of a property gain.