How Much Is Stamp Duty On a Second Home?

Looking to buy a second home, but need to budget carefully? One thing that you shouldn’t overlook is the additional Stamp Duty Land Tax that comes with purchasing an additional property outside of your main residence.

In England, a second home comes with an extra 3% in Stamp Duty on top of the usual rates. Don’t forget that there are currently cheaper rates for each band up until 30 September 2021.

But how do you know how much you need to pay? You can use a Stamp Duty calculator which works for England, Northern Ireland, Scotland and Wales – it’s by far the quickest and easiest way to find out how much you need to pay.

However, complications can arise if you’re not sure whether your purchase is classed as a second home or not. To help you out, we’ve listed some examples below.

What is classed as a second home?

Second homes will be predominantly holiday homes, or property investments. The extra Stamp Duty only applies to properties bought for £40,000 or more.

Caravans, mobile homes or houseboats are exempt from the second home Stamp Duty fee.

What if you inherit a second home?

Inheriting is not the same as buying so you won’t need to pay Stamp Duty. However, you will pay inheritance tax instead.

However, if you are the sole owner of the property and you go on to buy another property, you will need to pay the extra tax on that purchase. In contrast, iIf you’ve inherited 50% or less of the property then you won’t need to pay the extra Stamp Duty on a second property purchased within three years.

What if I own a property abroad?

If you own a property abroad and purchase another home in the UK, this will be classed as a second home.

In conclusion

Simply put, if you own one property you won’t have to pay the extra Stamp Duty. If you own a second property that matches the criteria listed above then you will need to pay the extra 3% on top of the usual rates.

Speak to a mortgage broker today

Got your sights set on buying a second property, but need a little help finding a mortgage and budgeting? Speak to Agentis today, to book your free initial consultation. As ‘Whole of Market’ mortgage brokers we can find you the best mortgage for your circumstances and help you budget accordingly. Speak to us today to organise your free initial consultation.