Stamp duty explained Buy-to-let stamp duty
Buy-to-let stamp duty calculator
Enter the price of a buy-to-let property or second home to find out how much stamp duty you'll have to pay on it.
Property price (£):
Use our buy-to-let stamp duty calculator to find out how much stamp duty you'll pay on a buy-to-let property or second home, and find out more about the new rates and who they apply to below.
The new buy-to-let stamp duty rules mean that anyone buying an additional property, including buy-to-let landlords and those buying second homes and holiday homes, will have to pay an extra 3% in stamp duty.
- Need a mortgage? Which? Mortgage Advisers can search the entire market for the best buy-to-let deal for your personal circumstances. Call 0808 252 7987 for a free consultation.
- For a no-obligation, fixed-price conveyancing quote, check out our new service, Which? Conveyancing
Stamp duty for buy-to-let investors and second homeowners
The new second home and buy-to-let stamp duty rates are tiered, just like residential stamp duty rates and income tax. Each tier, or portion of the property price, is now subject to an extra 3% stamp duty on top of the usual rate paid by those buying a home they are intending to live in.
You can check out the old and new stamp duty rates in the table below, and calculate how much you'll now have to pay using our buy-to-let stamp duty calculator, top right.
|Buy-to-let stamp duty rates|
|Portion of property price||Old stamp duty rate||New stamp duty rate (as of 1 April 2016)|
Take a look at this example to see how it works:
Buy-to-let stamp duty: who is exempt?
If you're married or in a civil partnership and either partner already owns a property, you'll have to pay the additional stamp duty regardless of how many properties you yourself own.
If the purchase is not made by an individual (eg the buyer is a company rather than a person), the additional stamp duty will apply regardless of how many properties the company owns.
So what properties are excluded from buy-to-let stamp duty?
If the total price paid for the property is under £40,000 you won't need to pay any stamp duty at all.
If you're buying a caravan, mobile home or houseboat, you'll also be exempt from stamp duty, regardless of the purchase price and whether it's going to be your main residence.
If you exchanged contracts on or before 26 November 2015, and then complete your purchase on or after 1 April 2016, you will be exempt from paying the higher rate of stamp duty.
If you buy a new home before selling your old one, you will have to pay the higher stamp duty rate. However, you can claim this back if you sell your original home within 36 months (three years) of buying the new one. The claim must be made within three months of the sale.
Holding financial interest in a property
It's unlikely that additional stamp duty will apply if you have inherited a small share (50% or less) in an additional property, or you hold a financial interest in one as part of a partnership or as a beneficiary of a trust.
However, there are exceptions, so you should declare any financial interests such as these to your solicitor.
- For help working out whether you'll have to pay higher stamp duty rates, Which? members can call the Which? Money Helpline. If you're not yet a member, try Which? Money for £1 for two months for full access to the helpline
Buy-to-let stamp duty: frequently asked questions
When exactly do I have to pay stamp duty?˅
If I buy a new home before selling my current one, will I have to pay the extra stamp duty charge?˅
What counts as a ‘main residence’ for stamp duty purposes?˅
I’m unmarried but live with my partner in a house that they solely own. I now want to buy a property in my own name. Will I have to pay the extra stamp duty charge? ˅
My husband/wife owns the property that we live in together. If I buy a property solely in my name, will I have to pay the extra stamp duty charge?˅
I’m buying a house in the UK, but already own a home abroad. Will I have to pay the extra stamp duty charge?˅
I own a property in the UK and want to buy a holiday home abroad. Will I have to pay the extra stamp duty charge?˅
I’m helping my child buy a property and already own my own home. Will I need to pay the additional charge?˅
It depends. If you’re gifting your child money for a deposit or acting as a guarantor on their mortgage, you won’t need to pay. If your name is going on the mortgage as a joint owner, you’ll technically own two properties so will need to pay the surcharge.
What happens if I inherit a property? ˅
What if I want to buy a home that has a ‘granny flat’ or annex?˅
I’ve split up with my partner but my name is still on the deeds. Will I need to pay the extra stamp duty when I buy a new house? ˅
Investing in a buy-to-let property
Investing in property has been very popular in the last few years. Recently, however, the buy-to-let sector has been coming under intense scrutiny, with the Bank of England monitoring closely for signs of the market overheating.
Buy-to-let can be profitable, but it's not always straightforward. Not only will you need to become an expert on the local property market and get a suitable mortgage, you'll also need to be prepared for the various responsibilities you'll face.
If you're buying a property with the intention of letting it out, unless you're buying it outright you'll need a buy-to-let mortgage. The best rates are typically on offer to buyers with deposits of at least 25%, but it is possible to unlock decent deals with a 15% deposit. Mortgage rates and fees tend to be a little higher than on residential mortgages, too.
The criteria can also be strict, with lenders looking closely at how much rent you're likely to bring in compared to your mortgage repayments.
Once you've bought the property, you need to consider the additional costs of letting a home, including landlord insurance, maintenance costs, agent fees and void periods.
- Finding a buy-to-let mortgage can be a confusing process, but you can get impartial advice on the right product for you by contacting Which? Mortgage Advisers on 0808 252 7987
- Find out how to get the best deal on a buy-to-let mortgage
- Check out our advice on becoming a landlord
- Explore Which? Mortgage Advisers' advice on tax for landlords
Your home may be repossessed if you do not keep up repayments on your mortgage.
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