Stamp Duty Land Tax for Landlords: Standard Rates, 5% Surcharge & Key Traps Explained

Why SDLT Changes Matter for Landlords

Stamp Duty Land Tax (SDLT) is often one of the largest upfront costs landlords face when buying property in England or Northern Ireland. From 1 April 2025, major changes came into force: the nil-rate band for residential property reverted to £125,000, and the surcharge for additional dwellings rose from 3% to 5%.

For landlords purchasing buy-to-lets, second homes, or holiday properties, these changes significantly increase acquisition costs. Understanding the current rules — including surcharges, exemptions, and regional differences — is vital to avoid overpaying or missing out on refunds.

Standard Residential SDLT Rates (2025/26)

As of 1 April 2025, the rates in England and Northern Ireland are:

• 0% on the first £125,000.

• 2% on £125,001 – £250,000.

• 5% on £250,001 – £925,000.

• 10% on £925,001 – £1.5m.

• 12% on anything above £1.5m.

These apply to the portion of the property price within each band.

Additional Property Surcharge: Now 5%

Landlords and second-home buyers must pay an additional 5% surcharge on top of the standard SDLT rates when buying another residential property.

This applies if:

• You already own one or more properties at completion.

• You are buying jointly with someone who already owns property.

Refunds may be available if you sell your previous main home within 36 months of purchase.

Key Traps & Edge Cases

• Low-value properties: The surcharge generally doesn’t apply if the property costs under £40,000.

• Main residence replacement: Refunds are only available if the old home is sold within the 36-month window.

• Non-resident landlords: Pay an extra 2% non-resident surcharge in addition to standard SDLT and the 5% surcharge.

SDLT in Scotland & Wales

Landlords in Scotland and Wales face different systems:

• Scotland: Land and Buildings Transaction Tax (LBTT), with its own bands and an Additional Dwelling Supplement (ADS).

• Wales: Land Transaction Tax (LTT), also with different rates and an additional property surcharge.

These regimes operate separately from SDLT and often result in higher effective tax costs.

How Wexley Helps Landlords Manage SDLT

At Wexley & Associates, we guide landlords through:

• Calculating SDLT accurately, including surcharges.

• Assessing eligibility for refunds when replacing a main residence.

• Advising on purchase structures (individual, company, non-UK resident).

• Forecasting tax liabilities before contracts are exchanged.

With our expertise, landlords can avoid surprises and make tax-efficient property investments.

Don’t Let SDLT Eat into Your Investment

The SDLT changes from April 2025 mean landlords now face higher acquisition costs. Without careful planning, these costs can erode rental yields and long-term returns.

Contact Wexley & Associates today to get expert SDLT advice and ensure your next property purchase is structured tax-efficiently.

References

• GOV.UK: SDLT residential property rates

• GOV.UK: Higher rates for additional properties

• GOV.UK: Non-UK resident surcharge

• [Related Wex Insider article: CGT on Selling a Buy-to-Let Explained]