Stamp duty rates, rules, and how to calculate your tax
When you buy a property in England or Northern Ireland, you may need to pay Stamp Duty Land Tax, or SDLT. For buy to let investors, the rules are different from those that apply to someone buying a home to live in. The rates are higher, and there are extra rules depending on your situation.
This guide covers the current rates, how to work out what you owe, and some key rules for investors. Stamp duty rates can change, so always check the latest HMRC guidance or speak to a qualified adviser before you complete a purchase.
Stamp duty on buy to let properties
Stamp Duty Land Tax is a tax you pay when you buy land or property in England or Northern Ireland above a certain price. Scotland and Wales have their own versions of this tax.
If you’re buying a second property, such as a buy to let, you pay a surcharge on top of the standard rates. This is currently 5% extra on each band. This applies whether you’re buying in your own name or through a limited company.
How much is stamp duty on buy to let?
The table below shows the current stamp duty rates for buy to let purchases in England. These rates apply to properties bought as additional properties, where you already own a home. Buy to let properties are subject to a 5% additional property surcharge, which is already included in the rates below.
| Property value | Standard rate | Buy to let rate (incl. 5% surcharge) |
|---|---|---|
| Up to £125,000 | 0% | 5% |
| £125,001 to £250,000 | 2% | 7% |
| £250,001 to £925,000 | 5% | 10% |
| £925,001 to £1,500,000 | 10% | 15% |
| Over £1,500,000 | 12% | 17% |
Rates correct as of April 2026. Always verify current rates with HMRC before completing a purchase.
How to calculate your buy to let stamp duty
Stamp duty is calculated in bands, like income tax. You pay each rate only on the part of the price that falls within that band. Here is a worked example.
Example: buying a buy to let for £300,000
| Band | Rate | Amount in band | Tax due |
|---|---|---|---|
| Up to £125,000 | 5% | £125,000 | £6,250 |
| £125,001 to £250,000 | 7% | £125,000 | £8,750 |
| £250,001 to £300,000 | 10% | £50,000 | £5,000 |
| Total | £20,000 |
For a quick estimate, you can use HMRC’s stamp duty calculator on the GOV.UK website.
Special rules and criteria for property investors
Several groups of buyers face different stamp duty rules. Here are the main ones to be aware of.
Purchasing through a limited company
If you buy a buy to let through a limited company, you still pay the 5% surcharge. There’s no way to avoid this by using a company structure. The same rates apply as for an individual buying an additional property.
That said, buying through a company can have other tax benefits when it comes to income tax and mortgage interest relief. If you’re considering this route, you can read more about limited company buy to let mortgages and speak to a tax adviser before you decide.
First-time buyers investing in buy to let
This is an area where the rules can catch people out. If you are a first-time buyer and you purchase a buy to let as your first and only property, two things apply:
- You don’t qualify for first-time buyer stamp duty relief. This relief is only available if you’re buying a property to live in. A buy to let doesn’t qualify.
- You don’t pay the 5% surcharge. The surcharge applies to people who already own a property. If this is your only property, even as a buy to let, you aren’t classed as an additional property buyer.
This means first-time buyer landlords pay the standard residential rates, with no relief and no surcharge. You can read more about the first time buyer buy to let mortgage rules in our separate guide.
The non-UK resident stamp duty surcharge
If you’re not a UK resident, you pay an extra 2% on top of the standard rates. This applies to both residential and buy to let purchases. Combined with the 5% buy to let surcharge, a non-resident buying an additional property could pay up to 7% more than a UK resident buying their first home.
Can I claim back stamp duty on buy-to-let?
In some cases, yes. If you paid the 5% additional property surcharge but then sold your previous main home within a set time limit, you may be able to claim a refund.
Understanding the 36-month refund rule
If you bought a new property before selling your old main home, you would have paid the 5% surcharge at the time. Once you sell your old home, you have 36 months to claim back the surcharge from HMRC.
To qualify, the property you sold must have been your main home, and the claim must be made within 36 months of selling it. You can make the claim through the HMRC website.
This rule doesn’t apply to buy to let investors who never lived in the property. If you bought a buy to let as an investment from the start, and you already owned your home, the surcharge isn’t refundable.
How and when to pay your stamp duty bill
You must submit a stamp duty return and pay any tax owed within 14 days of completing your property purchase. Your solicitor or conveyancer will usually handle this on your behalf as part of the buying process.
If you miss the 14-day deadline, HMRC can charge interest and penalties. Make sure your solicitor is aware of the timeline and has the funds ready to pay on completion day.
Stamp duty can’t be added to your mortgage. It must be paid as a cash cost at the point of purchase. Factor this into your budget when planning your investment.
Next steps for your property investment
Stamp duty is one of the biggest upfront costs of buying a buy to let. Making sure you have it covered before you commit to a purchase is a key part of your financial planning.
Once you have a clear picture of the tax costs, the next step is to look at your mortgage options. The type of mortgage you use, and who you use to find it, can have a big effect on your overall returns. Explore buy to let mortgages to see what is available.
Pepper Money works with expert mortgage brokers who understand the needs of property investors. Whether you’re buying your first rental property or adding to a portfolio, find a broker to talk through your options.