Stamp Duty on Buy-to-Let Property

Stamp duty is one of the biggest taxes you will have to deal with when investing in buy-to-let property, and every investor will have to pay it at some point in their property investment journey.

It can be tricky to understand how much stamp duty you need to pay when investing in buy-to-let, as different circumstances may mean you pay changing amounts when buying more buy-to-let properties.

This blog will break down what stamp duty is, how rates can change, what may affect the rate you pay and different ways you can lower the stamp duty you pay. For more information on other potential taxes, view our article on ‘what taxes are involved with buy to let?’ next.

Let’s get into it!

Stamp Duty Land Tax (SDLT for short) is a property tax imposed by HMRC on the sale of any residential property or land in the UK.

It is charged as a portion of the property’s sale price, which goes up the higher the property price is.

If you already own your own home, any property you buy will be classed as an additional property, and you will need to pay an extra 5% stamp duty on top of what you would normally pay.

In Scotland, this surcharge is referred to as Additional Dwelling Supplement or ADS for short.

Buy-to-let properties are considered additional properties when it comes to stamp duty, so you will have to pay the 5% surcharge on top of the base rate of SDLT. Given you will not be selling your home, you cannot claim back the surcharge when buying buy-to-let.

Unlike other forms of buy-to-let tax like income tax or capital gains tax, the amount you pay for buy-to-let properties does not change based on your annual income. The only thing that will affect the rate of stamp duty is the property’s value.

The amount you pay will go up on increasing portions of the property’s value, which we will explain when we talk about stamp duty rates later.

You will also have to pay another surcharge if you are investing from overseas, with the rate for England and Northern Ireland being 2%.

As we’ve mentioned previously, stamp duty rates change depending on the value of the property.

Try our stamp duty calculator to give you an accurate indicator of how much you’ll pay in Stamp Duty, or keep reading for a short breakdown.

Stamp Duty Rates for England and Northern Ireland

These are the current SDLT rates for England and Northern Ireland as of May 2025.

For example, if you were to sell your main residence and purchase a new home to live in for £300,000, the SDLT you owe would be £15,000. For a buy to let investor who is purchasing a second property to rent out, tax for the same amount would be £30,000.

Land and Buildings Transaction Tax Rates for Scotland

These are the current LBTT rates for Scotland as of May 2025.

If you are a first-time buyer looking to buy a buy-to-let property, have reduced rates depending on where you spend your money.

In England and Northern Ireland, you can claim tax relief on stamp duty for any property worth up to £300,000, while only paying 5% on the portion between £300,001 and £500,000. This means you won’t pay stamp duty on a property worth less than £300,000, provided it’s your first-ever property purchase.

There are no stamp duty exemptions for first-time buyers for the portion of any property over £500,000.

Scotland also has relief for first-time buyers, increasing the amount you don’t have to pay stamp duty on to £175,000. Wales has no stamp duty exemptions or relief for those buying their first home.

While it’s improbable you’ll be buying a buy-to-let property for your first property, it is worth noting it’d be cheaper this way.

Stamp duty can be an additional charge on top of the purchase price of the property, so it makes sense to find ways to avoid paying it if you can.

If Stamp Duty isn’t in your budget or you wish to avoid paying it, read our blog on how to avoid stamp duty on a second home, where we outline a number of ways to avoid Stamp Duty. 

If you’re in a couple, either married or unmarried, you may be wondering what buy-to-let rules for stamp duty apply to you depending on how many properties you both own individually.

For instance, some couples wonder whether a buy-to-let surcharge for stamp duty land tax would apply to them if only one person within the couple owns a property already.

Unfortunately, for married couples or those in a civil partnership, the buy-to-let surcharge tax price would apply in this circumstance.

This is because married couples or those in a civil partnership are treated as one person when it comes to stamp duty tax.

For those who are still married but not living together, this rule doesn’t apply.

Couples who are unmarried can also avoid these higher rates if the person in the couple who doesn’t already own a property buys a property as an individual, as they’ll still be classed as a first-time buyer.

Whether you’re ready to get started or still deciding if buy-to-let is a good investment for you, RWinvest is here to help.

We offer a range of buy-to-let properties to explore for sale in Luton, Birmingham, Liverpool, London, Manchester, and more.

We have over 20 years of experience in the buy-to-let industry and have a proven track record of helping investors find their perfect properties, with over 1000 five-star reviews on Trustpilot.

Round-the-clock care from our dedicated teams helps to make sure you feel safe and secure in your investment journey, and often our investment properties have assured rental yields to help you achieve financial freedom.