second home tax


What is second home tax in UK?

Second home tax in the UK is a levy imposed on individuals purchasing an additional residential property. While it is important to note that this tax is distinct from regular stamp duty. It is often referred to as a “surcharge” due to its supplementary nature. The primary objective of this tax is to discourage property speculation and create a fairer environment for first time homebuyers.

What taxes do I have to pay on a second home?

In England and Northern Ireland, the Stamp Duty Land Tax (SDLT) surcharge applies to second home purchases. The surcharge is applied on top of the standard SDLT rates and varies based on the property value:

  • 3% surcharge: Applies to properties valued between £40,001 and £125,000.
  • 5% surcharge: Applies to properties valued between £125,001 and £250,000.
  • 8% surcharge: Applies to properties valued between £250,001 and £925,000.
  • 13% surcharge: Applies to properties valued between £925,001 and £1.5 million.
  • 15% surcharge: Applies to properties valued over £1.5 million.

It is essential to note that these rates are subject to change. Individuals should verify the current rates before making a property purchase.

Which properties are liable for second home tax?

The properties that are liable for capital tax gain vary based on multiple factors, including usage, ownership status, and location. Let us explore the different scenarios in which second home tax liability comes into play:

Additional Residential Properties

If you already own a primary residence and decide to acquire another property that you would not be using as your main dwelling. It is likely that UK tax will apply to the purchase.

 Holiday Homes

Properties purchased purely for leisure purposes, such as holiday homes, are often subject to tax.

Rental Properties

Investors who purchase properties for the sole purpose of generating rental income. It is also likely to encounter tax liability.

 Vacant Properties

Properties that remain unoccupied for a significant period are often considered eligible for second home tax liability.

Are there any properties that aren’t subject to tax?

The general rule is that additional residential properties, holiday homes, rental properties, and vacant properties are subject to UK tax. There are exceptions to this rule. Here are some scenarios in which properties might not be subject to second home tax:

 Replacement of Main Residence

In certain cases, if you are purchasing a new property to replace your existing main residence. It might not be subject to tax.

 Non-Residential Properties

Properties that are not used as dwellings but rather for non-residential purposes, such as commercial or industrial use. It is typically not subject to tax.

Caravans, Houseboats, and Mobile Homes

In some jurisdictions, properties classified as caravans, houseboats, or mobile homes might be exempt from UK tax.

 Agricultural Land

Agricultural land or properties primarily used for farming or agricultural purposes may not be subject to tax.


The complexity of second home taxes, seeking advice from a tax professional is highly recommended. They can provide insights tailored to your specific situation, ensuring you maximize deductions and comply with local regulations.