Our article outlines a way of claiming back stamp duty on a second home or buy-to-let.
(3-minute read)
We will cover:
- How stamp duty is calculated
- Reclaiming SDLT if you’ve bought a second home or buy-to-let
How stamp duty is calculated
Stamp duty, also known as SDLT (Stamp Duty Land Tax) is a tax paid in England and Northern Ireland upon purchasing property.
Different rates apply depending on your tax bracket, and the property’s value.
They also vary depending on whether the property is your main residence, or additional property – such as a second home, or even a buy-to-let or holiday home.
However, the tax is only payable if the property is worth over £125,000.
The rates increase as the property value increases, and an additional surcharge applies if you’re purchasing a second home or additional property.
The SDLT rates for each property value are as follows:
| Property Value | Standard SDLT Rate | Second Home/Buy-To-Let SDLT Rate |
| Up to £125,000 | 0% | 3% |
| £125,001 – £250,000 | 2% | 5% |
| £250,001 – £925,000 | 5% | 8% |
| £925,001 – £1,500,000 | 10% | 13% |
| From £1,500,001 | 12% | 15% |
Stamp duty on a second home
As outlined above, a second home adds a 3% surcharge to the stamp duty you pay.
The amount of SDLT payable for each property value brackets are as follows:
| Property Price | Stamp Duty on Main Residence | Stamp Duty on Second Home/Buy-to-Let |
| £400,000 | £5,500 | £17,500 |
| £500,000 | £7,500 | £22,500 |
| £600,000 | £12,500 | £30,500 |
| £700,000 | £17,500 | £38,500 |
| £800,000 | £22,500 | £46,500 |
| £900,000 | £27,500 | £54,500 |
| £1,000,000 | £36,250 | £66,250 |
| £1,100,000 | £46,250 | £79,250 |
| £1,200,000 | £56,250 | £92,250 |
| £1,300,000 | £66,250 | £105,250 |
| £1,400,000 | £76,250 | £118,250 |
| £1,500,000 | £86,250 | £131,250 |
Claiming back stamp duty on second home
As you can see, the amount of stamp duty can be quite significant on a second home, so it is worth knowing when you can reclaim.
It is indeed possible to reclaim stamp duty on a second home if it is to become your main residence.
If you sell your previous residence within three years, you can claim back the amount.
This is useful, for example, for individuals who need to relocate quickly or who struggle to sell their previous residence.
What about couples?
Married or unmarried couples are treated as a unit for tax purposes if they purchase a second home. Therefore, the 3% surcharge still applies to them.
However, if you jointly own property, you can still reclaim SDLT when you’ve sold your share of the property – for example, in the case of getting a divorce.
How to reclaim stamp duty?
If you want to reclaim the higher rate of stamp duty on your second home, you can do it through HMRC.
In order to do this, you must access a form called “Apply for repayment of the higher rates for additional properties”.
Additionally, make sure you reclaim stamp duty within 12 months of selling your previous residence.
It’s best to speak to a Tax Expert if you require further assistance, to reach the best possible outcome and make sure you don’t fall prey to any unexpected surprises.
Contact us today at 01772 788200 to find out more about how we can help, or WhatsApp us out-of-hours at 07787 010190.
Sending an e-mail is simple too, just fill out this short form and we’ll get back to you!
Kind regards Ilyas