Stamp Duty rates for buy to let properties in England

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England and Northern Ireland Stamp Duty Rates for buy-to-let properties

As of the 23rd of September 2022, the stamp duty rates for properties changed quite a bit, this included changes to buy-to-let properties. 

Residential vs. buy-to-let stamp duty rates

Rates for stamp duty on a buy to let mortgage are 3% higher than the standard stamp duty rate. As a result, they can get as high as 15%. In Wales and Scotland, rates can get as high as 16% as they follow different rates of tax. Here are the rates when comparing them to residential properties.


Portion of property price (England and NI) Buy-to-let Stamp Duty rate
£0 – £40,000* 0%
£0 – £125,000** 3%
£125,001 – £250,000 5%
£250,000 – £925,000 8%
£925,000 – £1.5m 13%
£1.5m + 15%


Stamp duty rates for non – UK residents

When foreign investors look to make a property purchase in a buy to let investment in the UK, they pay slightly different rates of stamp duty by paying an additional 2% of the original buy to let rates.

Property price Standard Stamp Duty rate Overseas buyer stamp duty rate
£0-£250,000 0% 5%
£250,001-£925,000 5% 10%
£925,001-£1.5m 10% 15%
£1.5m+ 12% 17%


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Stamp Duty has been a tax in the UK that is applied to property and other securities. When it is applied to buy to lets it impacts the way in which landlords can use the mortgage for investments in property. The rates are usually higher than residential mortgages and differ depending on the value of the property.

There are some exceptions and ways to buy a property using a buy-to-let mortgage which makes the topic quite hard to cover in depth. This article aims to do just that, breaking down the topic so those looking to invest in a buy-to-let mortgage know all they need to know when it comes to Stamp Duty.

For more information, here you can find our article on mortgage advice for landlords.

What is the SDLT on a buy-to-let property?

The stamp duty for buy-to-let properties  are the taxes specific to those taking out a buy-to-let mortgage to buy a property. There are taxes for normal property sales and buy to let property sales. This is the difference.

Usually, buy-to-let mortgages are only taken out to buy an investment and are approved based on the property’s ability to produce rental income rather than the personal income of the property owner.

This buy-to-let status is what is used to determine whether stamp duty should be applied at the rate of a buy-to-let home purchase or a residential purchase.

Is there a stamp duty on buy-to-let properties?

Most of the time, yes there is a stamp duty applied to buy-to-let properties. Apart from those properties sold for under £40,000. Stamp duty is then applied to properties at increasing rates as the purchase price of a property goes up with the highest band for properties valued at £1.5 million and more being 15%

These rates are quite high when considering the history of stamp duty. Up until 1997, stamp duty was only applied at a rate of 1% for properties over £60,000. This 15% rate goes to show the large appreciation of properties in the UK if landlords can still continue to find a property investment of that scale worth it after being taxed that heavily.

To put this into perspective, a landlord buying a property in a buy-to-let mortgage for £2 million which isn’t that unrealistic in a property inside London would have to pay £300,000 in stamp duty tax.

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Are buy-to-lets exempt from stamp duty?

No, you have to pay stamp duty on a buy-to-let property. Unless a property is under £40,000. Also, the normal rates of stamp duty apply to a buy-to-let property purchase if the property is the first and only property someone has bought.

A buy to let home bought with SDLT

What are the freehold and leasehold stamp duty rates?

Freeholder stamp duty rates are have simpler categories with only three different tax bands, 0%, 2% and 5%.

Therefore, whenever a freeholder buys land or a leaseholder buys property from the freeholder, they pay stamp duty at different rates.

Freehold commercial property stamp duty rates

Property or lease premium or transfer value SDLT rate
Up to £150,000 0%
£150,001 to £250,000 2%
The remaining amount (the portion above £250,001) 5%


What are commercial leasehold stamp duty rates?

For a leaseholder buying a property from a freeholder, you don’t have to pay as much stamp duty as the freeholder but you will have to pay up to a maximum of 2%.

The rates for leaseholders are also a lot larger. The highest threshold for SDLT on freeholder purchases is £250,000 whereas the highest for a leaseholder is £5,000,000.

Net present value of rent SDLT rate
£0 to £150,000 0%
The portion from £150,001 to £5,000,000 1%
The portion above £5,000,000 2%

How much stamp duty will I pay on a buy-to-let?

The exact amount of stamp duty that a landlord pays when they buy a buy-to-let property is up to the value of the house as well as their personal situation. However, in general, buy-to-let property stamp duty rates are more than residential rates by 3% most of the time.

If you are struggling to make mortgage payments and pay stamp duty then you may be able to use an offset buy to let mortgage.

How can you pay stamp duty for a buy to let mortgage?

If you have a solicitor, you may be able to outsource this task to them who will be able to calculate the stamp duty and pay it on time and accurately. If not, you can do it yourself by visiting the .gov here.

Why is stamp duty higher for buy-to-let properties?

According to the chancellor at the time, there was an additional stamp duty added to the property in 2015 because ‘people who cannot afford to purchase a first home should not be squeezed out of the market by people buying a home to let’.

It was also planned that the money raised from additional stamp duty should be put back into the building of new affordable homes. This in fact happened because of the addition of the starter home fund in 2015. This scheme took £26 million of taxed money and put it into the development of brownfield land.

This brownfield land was neglected land that hadn’t been built on owned by the local authority. This land would then be released in order for new homes to be built on the land.

In fact, the addition of this surcharge of the stamp duty in 2015 when buy-to-let homes started to really get heavily taxed was so successful another funding programme was released a bit later. 

This was called the Starter Homes Local Authority Funding Programme which was given a £10 million budget. However, these schemes have been discontinued by the government, nonetheless, they have had a positive effect on the addition of new homes.

On the whole, it is clear that stamp duty is higher for buy-to-let properties for this very reason, allowing new buyers to gain access to the property market by taxing investors who look to cash in on the elevated appreciation of properties in the UK, in particular in London.

Are there any exceptions?

There are a few exemptions from stamp duty. One of which is if a buy-to-let property is the only property you own and it is also the first property you have ever bought.

In this case, you will not be completely exempt from stamp duty but instead, pay the normal rates as if you were buying a residential home.

Another way to become exempt from buy-to-let stamp duty rates is if you’re recovering after a divorce where you have lost the ownership of the original home you bought with a partner.

This will also make you exempt from stamp duty and land tax when you buy a new house as it will be classed as your first home.

Can you put your family home in your husband or wife’s name to avoid SDLT?

It is possible to put a buy-to-let property in another person’s name to avoid SDLT. As long as you do your research and make sure you get the desired tax benefits you were after. As well as this, it is vital you understand the potential implications of moving property into someone else’s name before you go ahead with it.

The easiest and safest way to do this is to use a transfer of equity, transferring property to a spouse. This is common anyway after marriage where couples want their partner’s name to be on the same assets their name is on.

Firstly, it is recommended you contact a conveyancing solicitor that will complete the legal documents needed for this process. These forms include land registry files and fees from the transfer.

This works by the current property owner transferring half of the equity over to their spouse. Instead of the owner receiving a cash payment, the half of the spouse that is being transferred equity takes on responsibility for any outstanding mortgage on the property.

If the amount left over from the mortgage transferred is less than £250,000 (the current threshold for standard SDLT), then there is no SDLT payable. It is important you inform HMRC about this transfer as it is completely legal here.

Is it still worth getting a buy-to-let ith stamp duty?

Purchasing a buy-to-let property is all up to the rental yield and income you will likely recieve from the property to make the amount of tax you pay worth it. Typical rental yields in the UK are around 4%.

For example, if a property has a rental yield that is at least 125% – 130% greater than the mortgage payments of a property, this is likely a good investment.

If your rental yields meet these figures, the property is likely to have approval for a buy-to-let mortgage and will likely produce profit in the long term. In terms of stamp duty and land tax, whether it is worth buying a buy-to-let property with this tax factored in is up to the individual scenario.

For example, if a property does a net profit after tax of £5000 per year as an example, you may be prepared to pay a higher stamp duty than if a property was to make just £2000 per year. There is a balance between rental yield and property appreciation. 

SDLT impacts the amount of profit a landlord can make on the appreciation of a property by making them pay more tax on the initial purchase of a property.

Calculating SDLT using a calculator

Can I avoid stamp duty on a second property?

Avoiding paying stamp duty on a second property requires a specific scenario that is written in legislation. These include scenarios where you have been divorced or you sell the first home you lived in before or around the same time you buy a second home or buy-to-let property.

In these cases, the property then gets classed as being a first home purchase anyway. So usually, there is no avoiding the stamp duty in place for second home purchases. However, there are some niche examples below that contain creative ways of legally avoiding SDLT.

What are the ways to avoid stamp duty on your second home?

To avoid stamp duty on a second home, buy somewhere to live that isn’t a house such as a boat home or put the property in a family member’s name.

The below scenarios are where stamp duty isn’t payable on a second home without classing your purchase as buying a first home by making the first property purchase invalid in some way.

Buy somewhere to live that isn’t a house

To begin, you can buy somewhere that isn’t classified as a house under the law but you can still live in. If you prefer to still live on land with the freedom to go wherever you want, a motorhome could be a good option. You can park up somewhere and stay there for weeks and move from place to place with no issue. No SDLT, just vehicle costs.

Similar to a motorhome, you could buy a caravan that has to be towed around. This would likely be bigger than a motorhome but you won’t have the freedom to move around as and when you please. Unless you had a towing vehicle

Finally, houseboats are exempt from all stamp duty. Buying one of these may give a rocky way of living and dwelling on a boat isn’t for everyone. Having said this, the tight-knit community of people who live in boats is something that appeals to a lot of people. It is certainly cheaper

Put the property in a family member’s name

Another way of getting around paying stamp duty and land tax on a second home is to put the home in a family member’s name. You could do this by signing on as a guarantor to the property. In this situation, you will be responsible for paying the mortgage payments on a home if the owner of the home cannot pay the mortgage.

In this sense, you can pay off a property that is in a family member you trust’s name. You will never own it but with the right instruction from your end, you can tell your family member to manage the property in the same way as you would and produce an investment for your family.

Buy a cheap home

Finally, there is always the option to just buy a home that is valued under £40,000. There is no stamp duty that should be paid for this band of home value. However, your options will be limited especially in a big city like London with a budget this small.

What you could do to bring the value of a property over the £40,000 mark is buy it for under £40,000, pay no stamp duty then add value to the property by doing a renovation or adding rooms to the premises. 

Over time, you can increase the rental income on this buy to let well over what the expected yield would be for a £40,000 property, even though you paid no SDLT.

Can you get a second-home stamp duty refund?

You can. And a SDLT refund happens when you buy a second home but it changes back to being classified as a first home, or you become exempt from stamp duty. There are a few reasons for this including:

  • If you or an agent acting on your behalf sold your previous home which was charged at the higher rate of SDLT by accident
  • If you couldn’t sell your previous home for reasons outside of your control within the last three years and you bought it after the 1st of January 2017

If you think you are eligible for this repayment, you can sign in to the government website and apply online here.

Buy-to-let mortgage

Buy-to-let mortgages are mortgages approved based on the rental income from renters in a property rather than the personal income of a landlord.

This is the main difference between this type of mortgage and a residential homeowner’s mortgage. Mortgages are loans given by UK banks to buy properties. This works well if you do not have all the cash upfront to buy a property at once, stretching out the payment of a house over sometimes decades. 

This is great for landlords because it allows them to keep very little equity in a home (typically a 20% – 40% downpayment) while still benefiting from rental income.

Instead of using personal income to pay back the mortgage like a typical homeowner’s mortgage, the landlord will also use the rental income to pay off the interest from the buy-to-let mortgage. This is the main difference between a buy-to-let and a residential mortgage.

Taking out a second home mortgage

To take out a second home mortgage, you have to pay the same rates of SDLT as if you were buying a buy-to-let property.

You would follow the same process of applying for a mortgage including

  • Prove your personal or rental income as part of a bank assessment 
  • Produce legal documents like personal ID, bank statements, and credit report
  • Paying a downpayment in accordance with the loan to value ratio of the mortgage

Second homes are taxed at the same rate as buy to let mortgages as it is considered an investment and the government prefers to give subsidised stamp duty rates to those buying a home for the first time to live in rather than exclusively an investment.

A group of homes bought with Stamp Duty and Land Tax

Can stamp duty be added to BTL mortgages?

You can in fact add stamp duty to your mortgage. If you decide to do this as a landlord you will need to pay additional interest rates as a result.

This is because the process involves you adding what you would pay in stamp duty to the mortgage and using a smaller amount of money down. Typically, the smaller a downpayment is on a mortgage, the more the interest rate is. Therefore, it is a decision you would have to make as a landlord to see if it is worth it for your situation.

What are buy to let stamp duty calculators?

If stamp duty confuses you, there is always the option to use a stamp duty calculator. They calculate the amount of stamp duty you pay for you.

Ultimately, there are a few questions you can ask yourself to see if you have to pay the highest rate tax threshold for stamp duty or not. These questions will probably be asked by the stamp duty calculator anyway. These are:

  • Do you already own one or more properties?
  • Will the property you’re buying replace the current property you live in?
  • Has your current residence ever been sold?

If you answered no to the first question, you don’t need to pay the higher rate of stamp duty. If you answered no to the second question, you will need to pay SDLT. Finally, if you answered no to the final question, you’ll need to pay the higher stamp duty rate but can get a refund if your old residence is sold within 36 months.

All in all, if you answered yes to all three of the questions, you will also need to pay higher stamp duty rates. 

Stamp duty calculators explained

A stamp duty calculator will ask you some similar questions alongside these questions and come up with a tax band to charge you on SDLT given the value of a property.

There are pros and cons to using a calculator. For one, there may be things that a calculator misses that mean you’re exempt from stamp duty. Having said this, there are some good calculators that provide very accurate information by answering a range of questions. There is a great one given by the government website you can find here

In conclusion

Buy-to-let mortgages are the most popular form of mortgage for those looking to buy property for investment. So, if you’re a landlord looking to invest, it is important you understand the rules around stamp duty and also capital gains tax if you want to take things seriously.

Beyond that, Strabo’s property investment guide gives a comprehensive overview of what else to look for from your property investment

Once you understand the rules, you’ll be able to make better decisions based on the location your property is in given different rates of stamp duty are applied depending on if you’re in Scotland, Wales or England and Northern Ireland.


Do Stamp Duty rates change every year?

Stamp duty rates do tend to change every year. Currently in 2023, stamp duty rates from the government can be found here

Does putting a property in a family member's name affect stamp duty?

You will not have to pay stamp duty and stamp duty is not affected if there is no mortgage on the property left over and you are passing down the property to a child or family member as a gift.

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Donnell Bailey

Property expert

Donnell is a property expert focusing on the property market, he looks at a combination of legislation, information from property managers, letting agents and market trends to produce information to help landlords.


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