What Property Investors Pay in 2026-27
Stamp duty land tax on a buy-to-let purchase in England runs off two stacked tables: the standard residential bands, plus a 5% surcharge on the whole price because the property is an additional dwelling. The surcharge applies to any purchase of £40,000 or more that leaves you owning more than one dwelling, and the SDLT return and payment are due within 14 days of completion.
| Purchase Price Band | Standard Rate | Investor Rate (with surcharge) |
|---|---|---|
| £0 - £125,000 | 0% | 5% |
| £125,001 - £250,000 | 2% | 7% |
| £250,001 - £925,000 | 5% | 10% |
| £925,001 - £1.5m | 10% | 15% |
| Over £1.5m | 12% | 17% |
Autumn Budget 2025 left SDLT untouched, so these bands hold for the 2026-27 tax year. The official residential SDLT rates have not moved since the temporary nil rate band reverted to £125,000 in April 2025, and receipts of £15.2 billion in 2025-26 came in ahead of forecast, which gives the Treasury little incentive to cut.
A Harrow Worked Example
Take a £525,000 buy-to-let purchase, close to the borough average of roughly £527,000 in the ONS house price data for Harrow this spring. The bill is 5% on the first £125,000 (£6,250), 7% on the next £125,000 (£8,750) and 10% on the remaining £275,000 (£27,500), a total of £42,500, an effective rate of about 8.1%.
An owner-occupier replacing their only home would pay £16,250 on the same property. The surcharge alone costs the investor £26,250, which is why it belongs in the purchase appraisal from day one rather than as an afterthought at conveyancing.
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How the 5% Surcharge Works
The surcharge rose from 3% to 5% at Autumn Budget 2024 and applies to the entire purchase price, not just the slice above a threshold. It counts dwellings anywhere in the world, so a landlord who owns a flat abroad pays the higher rates on their first UK rental purchase.
There is one important refund route. If you buy a new main residence before selling the old one, you pay the surcharge up front but can reclaim it if the former main residence sells within 36 months. The claim must reach HMRC within 12 months of that sale. The refund never applies to pure investment purchases, including buy-to-sell flips.
Buying Through a Company
A limited company pays the surcharge from its very first property and can never claim first-time buyer relief. On dwellings over £500,000 a flat 17% rate applies by default, though a genuine property rental business can claim relief back to the normal investor bands, subject to clawback if the use changes within three years. The income tax case for an SPV, chiefly that it sidesteps Section 24, has to be weighed against this entry cost.
Moving a property you already own into a company is a purchase for SDLT purposes, charged on full market value with the surcharge on top, and usually a disposal for capital gains tax as well. Running the numbers with a properly structured SPV property company before transferring anything is far cheaper than unwinding a mistake.
Non-Resident Buyers Pay 2% More
Buyers who were not present in the UK for at least 183 days in the 12 months before completion pay a further 2% on top of every other rate, including the surcharge and the 17% flat rate. On the £525,000 example that adds £10,500, taking the total to £53,000 for a non-resident individual investor.
Reliefs That No Longer Exist
Multiple dwellings relief was abolished from 1 June 2024, closing the discount on bulk purchases of two to five units. Purchases of six or more dwellings in one transaction can still elect to use the non-residential rates, which caps the top rate at 5% and often beats the residential tables on larger deals.
SDLT is never deductible against rental income. It is a capital cost of acquisition, so it forms part of the capital gains tax base cost and only saves tax when you eventually sell.
Frequently Asked Questions
Do you pay stamp duty on a buy-to-let property?
Yes. Any buy-to-let purchase of £40,000 or more in England attracts the standard residential bands plus the 5% additional dwelling surcharge on the whole price, payable within 14 days of completion.
Can I get the 5% surcharge refunded?
Only in one situation: you bought a new main residence while still owning the old one, and the old main residence sells within 36 months. Investment purchases, holiday homes and flips do not qualify, however quickly they are resold.
Does a limited company pay the surcharge on its first property?
Yes. Individuals only pay the higher rates once they own more than one dwelling, but a company pays them from property number one, and on dwellings over £500,000 it must also claim relief from the 17% flat rate.
Is stamp duty tax deductible for landlords?
Not against rental income. SDLT is a capital cost, so it reduces the taxable gain when the property is sold rather than the profit taxed each year.
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