Please Note: This Article is 2 years old. This increases the likelihood that some or all of it's content is now outdated.

Chancellor, Rishi Sunak, has opened up an investment window until next March next year for those considering investing in a buy-to-let or second home.

The stamp duty holiday for all homes, including second homes and buy-to-let purchases, can potentially save buy-to-let and second home buyers up to £15,000.

Buy-to-let landlords who purchase new investments between now and March 2021 will benefit from this temporary stamp duty waiver; it has the potential to save them many thousands of pounds.

Currently, buy-to-let investors and second home purchasers pay a 3% stamp duty land tax (SDLT) surcharge on top of the normal stamp duty rates.

What Chancellor Sunak has said is that these buyers will only pay the tax at a rate of 3pc on the first £500,000 of a property’s price. Previously, second home buyers would pay 3pc on the first £125,000, after that they were charged 5pc on the next £125,001 to £250,000, with the rates increasing as the property value did.

The stamp duty holiday will last until March 31 2021. Those buying a main home will not be charged any stamp duty at all on the first £500,000.

With all the changes hitting the private rented sector over the last few years, with increased regulatory obligations on landlords and tax increases, there’s been an observable increase in the number of landlords leaving the market.

This new tax incentive should provide a real impetus to the market to reverse the exiting trend, especially at a time when the demand for rental accommodation has never been higher.

At the lower end, a landlord aquiring a buy-to-let valued at £150,000 should save around £500 on stamp duty, whereas buying a property worth £500,000 the saving could be around £15,000

Previously the stamp duty (SDLT) rates were as follows:

  • Up to £125,000 – Zero
  • The next £125,000 (the portion from £125,001 to £250,000) – 2%
  • The next £675,000 (the portion from £250,001 to £925,000) – 5%
  • The next £575,000 (the portion from £925,001 to £1.5 million) -10%
  • The remaining amount (the portion above £1.5 million) – 12%

And in each case with a 3% addition for buy-to-lets and second homes.

If owners buy a second property before they sell their main residence, with the intention of moving home, i.e., the purchase of the new home goes through before the sale of their main residence, then the 3% surcharge will be payable, subject to a refund when the sale does go through, but this must be within a 36 months window.

There are some exceptions to the rules which make some allowance for delays in sales caused by the Covid-19 pandemic.

Now, with the normal stamp duty rates having been cut, those buying an additional home, buy-to-let or second home will all benefit in some way.

Buy-to-let landlords will pay 3pc tax on the first £500,000 of the property’s price, 5pc on the value between £500,001 to £925,000, 13pc on the next £575,000 (the portion from £925,001 to £1.5m) and 15pc on anything over £1.5m.

Previously these respective tax bands for landlords were: 3pc up to £125,000, 5pc on anything between £125,001 and £250,000 and 8pc on the value between £250,001 and £925,000. The tax rates for the bands between £925,000 to £1.5m and over £1.5m have not changed.

Anyone who purchases a buy-to-let who already owns their main residence has to pay the 3% surcharge, as does anyone who helps a child buy a property.

As with all major changes to the tax rules, the system has thrown up many anomalies. For example self-builders have been charged when in theory they are exempt under the rules, because they are still in their current home longer than expected, and married couples have been caught by the tax when they could have saved thousands in SDLT by getting divorced first before they split and buy separate homes.

Stamp Duty Land Tax Rules

Please Note: This Article is 2 years old. This increases the likelihood that some or all of it's content is now outdated.


  1. If a (Buy to let landlord as ) company buys, a residential property for £550k, to let out what would be the stamp duty be?


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