What Stamp Duty Land Tax (SDLT) rate applies for the purchase of a second home? What is the SDLT higher rate? Are there any reliefs from the SDLT higher rate?

This is a freeview 'At a glance' guide to the residential property higher rate of SDLT. Subscribers can view their detailed guide here.

At a glance

  • From 1 April 2016 a higher additional 3% surcharge is added to the basic rate of SDLT on the purchase of
    • An additional dwelling by an individual. 
    • A dwelling purchased by a company.
  • Where the property will fall within the Annual Tax on Enveloped Dwellings (ATED) regime, the purchase of a property costing more than £500,000 by a company will be subject to 15% SDLT and the 3% surcharge cannot apply.
  • Properties outside England and Northern Ireland are not subject to SDLT but are relevant in considering whether the higher rates apply.
  • There are special rules for trusts and beneficiaries.

What are the higher rate SDLT rates and bands?

What's new? & COVID-19 changes

What do the higher rates apply to?

The higher rate only applies to purchases of major interests in dwellings.

While the definition of a dwelling is related to the Definition of a residential property (for SDLT) it has not got the same meaning.

A dwelling includes:

  • Buy-to-lets.
  • Holiday homes even if there are restrictions on use.
  • Furnished Holiday Lettings (FHL).
  • Residential accommodation for school children or the armed forces.

The following are not treated as dwellings and the higher rate charge does not apply:

  • Non-residential properties, including children's homes, purpose-built accommodation for students in higher education, care homes, hospices, prisons, hotels, inns (or similar establishments).
  • Properties costing less than £40,000.
  • Caravans, houseboats and mobile homes.

SDLT FAQs

  • Is land a dwelling?
  • Can a field be grounds?
  • What about annexes and subsidiary dwellings?
  • Can a derelict property be a dwelling?

See Subscriber Guide: SDLT Residential Property & dwellings

Multiple Dwellings Relief (MDR): Purchase of more than one dwelling

  • Where two or more dwellings are purchased in a single transaction, Multiple Dwellings Relief (MDR) can be claimed.  
  • Where six or more dwellings are purchased in one transaction, the purchaser can choose whether to apply MDR and the higher residential rates or apply the non-residential rates with no MDR.

What does HMRC say about mixed-use properties?

Is there any relief if a property is purchased for use as a dwelling in a trade?

Yes, but only in limited circumstances. See Subscriber Guide SDLT Residential Property Higher Rates

Married couples and civil partners

  • Married couples and civil partners are a single unit and can only own one main residence between them at any one time for the purposes of the higher rates.
  • See Subscriber Guide SDLT Residential Property Higher Rates

Joint ownership

If two or more people own or purchase property jointly, see Subscriber Guide SDLT Residential Property Higher Rates

Special rules for business partners

When a partnership in which you are a partner owns a dwelling used for the partnership’s trade. 

Special rules for inherited properties

What is classed as my main residence?

  • There is no main residence election for SDLT. HMRC will determine which is your main residence based on the facts and may consider a broad range of indicators. See Subscriber Guide SDLT Residential Property Higher Rates

What are the conditions for relief if I am replacing my main residence?

Useful guides on this topic

SDLT: Residential property higher rates
What Stamp Duty Land Tax (SDLT) rate applies for the purchase of a second home? What is the SDLT higher rate? Are there any reliefs from the SDLT higher rate?

SDLT: Multiple DwellingsRelief
What is multiple dwellings relief? When does it apply and how is it claimed?

SDLT: Linked transactions
What are linked transactions? When do the linked transaction rules apply for SDLT? How do I calculate SDLT on a linked transaction?


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