Can You Avoid Stamp Duty on Your Second Home?

You may be looking to use some of the equity in your current home for a buy-to-let to secure income for your retirement, or are searching for a holiday home to spend time with the family. In either scenario if you are buying a second home or an additional property you will have to pay Stamp Duty which can be a significant financial implication for any purchase decision.

You may be aware that Stamp Duty Land Tax (SDLT) is payable when you buy residential property and that different rates are payable depending on the value of the property. The other factor to be aware is for second and any additional properties you will usually have to pay 3% surcharge on top of SDLT rates at each purchase.

The stamp duty rates have swapped and changed a little in the past year, in reaction to the effect the Coronavirus pandemic has had on the property market, however the current rates are shown below.

The rates from 1 July 2021 – 30 Sept 2021 in England & Northern Ireland are:

You can also use the SDLT calculator to work out how much tax you’ll need to pay.

There are some ways to avoid or limit the stamp duty you pay, however. For instance, if you want to help your children or grandchildren buy a home then there are ways to avoid the additional stamp duty fees by simply gifting a deposit or acting as a guarantor for the mortgage, since you won’t be classed as owning the property if you do either of those.

There are some ways to avoid or limit the stamp duty you pay. For example, if you buy a caravan, mobile home, or houseboat. And of course if you sell your current property within three years of purchasing your second home you can claim the extra stamp duty back.