Published: 20 October 2026
A second home in the UK remains a coveted asset, whether a country house in the Cotswolds, a London pied-à-terre or a coastal retreat. It is also a purchase on which the tax position has tightened considerably in recent years. Prospective buyers should now weigh not only the cost of acquisition, but the charges that accrue during ownership and on eventual sale. This guide sets out the principal points related to second homes tax as they stand in October 2026.
Stamp Duty on additional dwellings
In England and Northern Ireland, buyers of an additional residential property pay Stamp Duty Land Tax (SDLT) at the higher rates for additional dwellings. Since 31 October 2024 the surcharge has been 5 percent, up from 3 percent. It is added to every band, including the slice that would otherwise be taxed at nil.
The rates for stamp duty on a second home, with the standard rate in brackets, are as follows:
- Up to £125,000: 5% (standard 0%)
- £125,001 to £250,000: 7% (standard 2%)
- £250,001 to £925,000: 10% (standard 5%)
- £925,001 to £1.5 million: 15% (standard 10%)
- Above £1.5 million: 17% (standard 12%)
By way of illustration, a second home purchased for £1 million attracts SDLT of £93,750, against £43,750 for a buyer replacing their main home. At £2 million the bill is £253,750.
The surcharge applies where the purchase price is £40,000 or more and, at the end of the day of completion, the buyer owns more than one dwelling and is not replacing their main residence. Property held overseas counts towards that test, as can a small inherited share, and married couples and civil partners are generally treated as a single unit.
Replacing a main residence
Buyers who complete on a new main home before selling the old one will pay the surcharge at the point of purchase. It can be reclaimed if the previous main residence is sold within three years, but the cash-flow impact should be planned for.
Non-UK resident buyers
A further 2 percent surcharge applies to purchasers who are not UK residents, broadly those present in the UK for fewer than 183 days in the twelve months before purchase. It is charged on the whole price and stacks with the additional dwellings surcharge, a combined seven percentage points above standard rates. A non-resident buying at £2 million would therefore pay £293,750.
Buying through a company
Purchases made through a company are treated differently. A flat rate of 15 per cent can apply to residential purchases above £500,000 unless a relief is available, and the Annual Tax on Enveloped Dwellings may also be due. The structure should be settled with advisers before contracts are exchanged.
Scotland and Wales
The devolved nations set their own taxes, and they are generally less forgiving. Scotland charges an Additional Dwelling Supplement of 8 percent of the whole price on top of Land and Buildings Transaction Tax, so a £1 million second home costs in the region of £158,000, against £93,750 in England. Wales applies its own, higher residential Land Transaction Tax rates to additional property, introduced in December 2024.
The second home council tax premium
Ownership costs have also risen. Since 1 April 2025, English councils have been able to charge a premium of up to 100 per cent on furnished homes that are nobody's main residence, doubling the annual bill. A £2,500 bill becomes £5,000, an additional £50,000 over a twenty-year hold.
The premium is discretionary, but adoption is widespread: official figures show 211 of 296 authorities applied it in 2025, all at the full 100 per cent. Wales permits up to 300 per cent. Certain exceptions exist, including for a property actively marketed for sale or let, so buyers should confirm the position with the relevant council before committing.
Letting the property
The furnished holiday lettings regime was abolished from April 2025. Owners who intend to let should model the income as ordinary property business income, without the reliefs that previously applied.
Capital Gains Tax on second home sales
Gains on residential property are taxed at 18 percent or 24 percent, depending on income, after an annual exempt amount of £3,000. A higher-rate taxpayer with a gain of £120,000 and £4,000 of allowable selling costs would have £113,000 chargeable and a bill of £27,120.
A UK property disposal return must be filed, and the tax paid, within 60 days of completion. Private residence relief is generally unavailable on a property that is not the owner's main home, although an election to nominate it as the main residence can be made within two years of acquiring a second. Non-residents are also within the charge on UK property.
What lies ahead
The Autumn Budget 2025 announced a High Value Council Tax Surcharge on English homes valued at £2 million or more, due from April 2028 and collected alongside council tax. For owners at the upper end of the market it will sit on top of any second homes premium. Given the pace of recent change, buyers should treat the figures above as a snapshot rather than a settled position.
Practical considerations
Tax should be budgeted as a core acquisition cost, alongside legal fees, survey costs and finance charges. Establish early whether the surcharge applies and whether a refund route is realistic. Ask the relevant council about its premium and exceptions. Above all, appoint a solicitor and tax adviser before exchange, particularly for overseas, joint or company purchases.
It should be noted that this blog is presented for guidance and informational purposes only. It does not constitute legal or financial advice, especially with respect to property taxes. Please seek out professional counsel on this matter and, if you are considering a property purchase in the UK, please reach out to connect with one of our specialists.
