Stamp Duty for Buy to Let – Everything you need to know

Buy to let opens up a whole new world to property investors, and it’s an exciting prospect. It makes sense to know exactly how much the buying process will cost you, so you can factor all the potential expenses into your business plan. If you’re exploring the thorny subject of stamp duty for buy to let, this one’s for you. Do you pay stamp duty for buy to let? If so, how much stamp duty do you need to pay on buy to let? Read on for expert advice and guidance plus a detailed FAQ. By the end of this article you’ll be crystal clear. This is your guide to buy to let property stamp duty. 


What is Stamp Duty?

key in door

First, let’s set the stage with a definition of stamp duty. What is stamp duty or SDLT? Stamp Duty is a tax you might have to pay when you buy a new home valued at more than a set amount. Not everyone pays it. SDLT only applies to properties worth more than £250,000. 

The amount you pay depends on:

  • When you bought the property
  • How much you paid for it
  • Whether you’re eligible for relief or an exemption


Do you pay stamp duty with buy to let properties? Yes, you’ll pay the normal rate plus an extra percentage. If you’re buying a second home in England or Northern Ireland and it’s worth more than £40,000 you will be asked to pay an extra 3% Stamp Duty. Additional rates also apply in Scotland and Wales, which we’ll talk about in the next section. It also applies to second homes and holiday homes, as well as purchase for buy-to-let.

Where did the name come from? These taxes were originally named ‘stamp duties’ because of the physical stamp that was put on legal documents as proof of the official recording of the transaction, also proving the tax had been paid. There’s no actual stamp these days but the name remains. 


Buy-to-let Stamp Duty Rates

As we’ve mentioned, buying a second property, third, fourth or more when you’re not going to live in it yourself will mean you have to pay 3% extra in stamp duty. But as a first time buyer, you don’t. If you have never owned your own property before and want to invest on a buy to let basis, as a first time buyer, you simply pay the relevant standard home mover SDLT rate: 


  • Purchase price up to £250,00: – buy to let SDLT: 3%
  • £250.001 – £925,000: SDLT: 8%
  • £925,001 – £1.5 million: 13%
  • Over £1.5 million: 15%


How much stamp duty on buy to let? It’s important to know that SDLT rates on second properties and buy to let properties is 3% higher than the standard rate in England and Northern Ireland, Scotland and Wales’ governments have set the rate at 4% higher than standard.  

Buy to Let Stamp Duty FAQs

Next, let’s take a look at the most frequent questions people ask about buy to let stamp duty payments. 

Q: Why is there extra stamp duty tax on buy-to-let homes? 

In 2015 the government announced 3% extra stamp duty for anyone buying a second home. The intention was to help first time buyers by ploughing the extra tax revenue generated into building affordable new homes. 

Q: How is a ‘main residence’ defined? 

According to the tax man, your ‘main residence’ for stamp duty is the place where you and your family spend most of your time. It’s common sense really. If it’s your normal home, it’s your main residence. 

Q: What if my main residence is abroad – do I still need to pay extra stamp duty for a buy to let property?

Yes. If you own a property overseas and live in it, you still have to pay the additional stamp duty rate when you buy property as an investment. 

Q: Are there any exceptions to the additional stamp duty rate?

Yes. There’s no stamp duty on properties worth less than £40,000 but, as you’ll already know, properties that cheap are very rare indeed. You can also buy a caravan, mobile home or houseboat without paying extra stamp duty. And, as we’ve mentioned, if the first place you ever own is going to be buy-to-let, the standard stamp duty rates apply. You won’t have to pay the extra percentage. 

Q: When and how do I pay the extra stamp duty?

You pay the extra amount at the same time you pay your standard SDLT bill and it’s paid in the same way as your regular stamp duty, usually by bank transfer. Your conveyancer usually completes and files the  SDLT return with HMRC, having calculated how much you owe. They’ll pay it on your behalf along with your return, then add it to their fees. If you’re doing it on your own, without a conveyancing expert, you need to file the return and pay the stamp duty yourself, and it has to happen within 14 days of completion. 

Q: Can I avoid stamp duty by putting our main property in my partner’s name?

No. The tax office considers married couples as a single person, a single unit for tax purposes. On the other hand if you’re an unmarried couple you can put just one of your names on the deeds for your main home, then buy a second place in your partner’s name. 

Q: Can I claim back stamp duty on buy-to-let? 

No. But you might be able to claim a Stamp Duty refund if you bought your new main residence without selling the previous place, then sold your previous residence within 3 years. 

Q: Do you pay stamp duty on shared ownership properties?

Yes, you’ll have to pay Stamp Duty on all shared ownership properties, even though you only own a percentage of it yourself. 

Q: What about inherited property that’s rented out?

Don’t worry. There’s no stamp duty to pay on an inherited property. 

Q: Does SDLT apply for homes that are uninhabitable? 

If the place is derelict or uninhabitable you won’t pay extra stamp duty, because it isn’t suitable as a home.   

Q: What if I purchase a buy-to-let property through a Limited company?  

While there’s no exemptions on stamp duty when you buy a buy-to-let property as a limited company, if you already own a buy to let home before deciding to set up a Limited company, you’ll pay the stamp duty again because you’ll need to ‘sell’ the property to your own Limited company.

Q: Is there still a ‘stamp duty holiday’ to take advantage of? 

No, unfortunately this  ended on 1st October 2021. 

Now you know all about buy to let property stamp duty and understand how much extra stamp duty you’ll be liable for when buying a place to let. First, check if you can take advantage of any exemptions. Then factor SDLT into your plans to make sure the extra you’ll pay won’t leave you facing financial problems. Once you’re ready to kick off your property search, we can help you with a collection of wonderful places to buy then let.