Stamp Duty on Buy-to-Let: What You Will Pay in 2026

Stamp duty on a buy-to-let is not a rounding error. On a £350,000 purchase, you pay £25,000 before a tenant has moved in. On a £500,000 purchase, it is £40,000. That comes out of your own funds, upfront, and it reduces the return on every penny you invest.

Since October 2024, every buy-to-let purchase in England and Northern Ireland has attracted a 5% additional dwelling surcharge on top of standard Stamp Duty Land Tax rates. The surcharge was raised from 3% at the Autumn Budget 2024. It applies to every band of the purchase price, with no exemption for lower-value properties.

Running numbers on a deal without accounting for SDLT is one of the most common mistakes new landlords make. This guide covers the current rates, four worked examples, and what reduces your bill and what does not.

Why SDLT Hits Harder on Buy-to-Let

Standard SDLT applies to every property purchase in England and Northern Ireland. A main home buyer pays nothing on the first £125,000, then 2% on the portion between £125,001 and £250,000, and so on up the bands.

A buy-to-let buyer pays the additional dwelling surcharge on top of every one of those bands, including the part below £125,000 where owner-occupiers pay nothing at all.

On a £250,000 purchase, an owner-occupier currently pays £2,500 in SDLT. A buy-to-let buyer pays £15,000. The difference is the surcharge working across the full purchase price.

This is also why gross yield figures can mislead you when you first look at a deal. A property advertised with a 6.5% gross yield on a £250,000 asking price does not reflect the £15,000 in SDLT you are paying before a tenant arrives. Your actual total investment is higher. Your actual yield is lower.

The 5% Additional Dwelling Surcharge

The additional dwelling surcharge was raised from 3% to 5% on 31 October 2024. It applies to all transactions completed on or after that date.

The surcharge works on top of the standard residential SDLT bands, not as a flat addition to the total bill. Each slice of the purchase price is taxed at the relevant band rate, with 5 percentage points added to that rate.

There is no threshold below which the surcharge disappears. It applies from the first pound on properties where you already own another dwelling.

An additional dwelling is broadly any residential property that is not your main home at the point of purchase. This captures buy-to-let, second homes, and holiday lets.

Current BTL SDLT Rates (from 1 April 2025)

The nil-rate band reverted from £250,000 to £125,000 on 1 April 2025. These are the effective SDLT rates for buy-to-let purchases that have applied since that date:

Band	Rate
Up to £125,000	5%
£125,001-£250,000	7%
£250,001-£925,000	10%
£925,001-£1.5m	15%
Over £1.5m	17%

No new SDLT threshold changes have been introduced in 2026. The current rates have been in place since 1 April 2025, and apply to all BTL purchases in England and Northern Ireland.

Source: GOV.UK stamp-duty-land-tax/residential-property-rates [verified May 2026]

What You Will Actually Pay: Four Worked Examples

SDLT is calculated on a slice-by-slice basis. Each portion of the purchase price falls into the relevant band and is taxed at that band's rate. Here is what it looks like at four common price points.

£150,000 buy-to-let

• 5% on £125,000 = £6,250
• 7% on £25,000 = £1,750
• Total SDLT: £8,000 (5.3% effective rate)

£250,000 buy-to-let

• 5% on £125,000 = £6,250
• 7% on £125,000 = £8,750
• Total SDLT: £15,000 (6.0% effective rate)

£350,000 buy-to-let

• 5% on £125,000 = £6,250
• 7% on £125,000 = £8,750
• 10% on £100,000 = £10,000
• Total SDLT: £25,000 (7.1% effective rate)

£500,000 buy-to-let

• 5% on £125,000 = £6,250
• 7% on £125,000 = £8,750
• 10% on £250,000 = £25,000
• Total SDLT: £40,000 (8.0% effective rate)

These figures assume a standard purchase in England or Northern Ireland by a UK resident individual or company. No reliefs apply.

One thing to notice in the table: the effective rate climbs as the purchase price rises. At £150,000 you are paying 5.3p in SDLT for every pound spent. At £500,000, it is 8p. That progression matters when comparing yields at different price points.

Source: calculations based on GOV.UK rates table [verified May 2026]

When SDLT Must Be Paid

SDLT returns must be filed and the tax paid within 14 days of completion. This is a firm deadline with no grace period. If you miss it, HMRC charges interest on the unpaid amount automatically.

The 14-day clock starts from the completion date, not the exchange date. Put it in your diary when you exchange, because by the time you reach completion you will have other things on your mind. Your solicitor or conveyancer will typically handle the return and payment on your behalf, but it is your liability if it is missed.

First-Time Buyer Relief Does Not Apply

This catches some landlords out. First-time buyer (FTB) relief reduces SDLT on purchases up to £300,000 for people buying their first home. From 1 April 2025, the FTB relief threshold was reduced from £425,000 to £300,000.

The relief is for a main home only. If you are buying an additional dwelling (a buy-to-let, a second home, a holiday let), the additional dwelling surcharge applies and FTB relief is not available. This holds true even if you have never personally owned a property before.

Some investors in this position expect a discount on the SDLT because they are a first-time buyer in the literal sense. There is none. The purchase is classified as an additional dwelling purchase, and that classification overrides the FTB status.

Scotland and Wales: Different Rules

SDLT applies in England and Northern Ireland only. Scottish and Welsh purchases are governed by separate systems.

Scotland has Land and Buildings Transaction Tax (LBTT), administered by Revenue Scotland, with an Additional Dwelling Supplement (ADS) for buy-to-let and second home purchases.

Wales has Land Transaction Tax (LTT), administered by the Welsh Revenue Authority, with higher residential rates for additional dwellings.

Both have their own rate bands, thresholds, and reliefs that differ from SDLT. If you are buying in Scotland or Wales, check the Revenue Scotland website (revenue.scot) or the Welsh Revenue Authority pages (gov.wales) directly. The figures in this article do not apply to those purchases.

Limited Companies Pay the Same Rates

Buying via a limited company does not reduce the SDLT bill. A company purchasing residential property pays the same SDLT rates as an individual buying an additional dwelling, including the 5% surcharge.

This is relevant to know because limited company purchases for buy-to-let have grown sharply. 43% of BTL mortgage purchases in 2025 went through a limited company structure, up from under 8% in 2018. If you are incorporating primarily to save on SDLT, that will not work. Incorporation decisions rest on the treatment of rental profits, mortgage interest deductibility under Section 24, and your longer-term exit strategy. SDLT is the same either way. If you are weighing up whether to buy through a company, our guide on buy-to-let limited companies covers the full picture.

There is a separate 17% flat rate for companies acquiring high-value residential dwellings in certain circumstances, but this rarely applies to standard BTL SPV purchases of individual properties.

How SDLT Affects Your Yield on Total Investment

SDLT is part of your total cost of purchase, alongside legal fees, survey costs, and any initial renovation work. When you run yield figures, the denominator should include all of these costs, not just the purchase price.

On a £250,000 property with £15,000 in SDLT and £3,000 in legal and survey fees, your true cost before any work is £268,000. A gross rental income of £15,000 per year gives you 6.0% on the purchase price but only 5.6% on the real total investment, before even accounting for the costs inside the property.

RealYield's calculator includes SDLT and all other purchase and running costs in the yield calculation. That is the number worth knowing before you commit.

This article is for informational purposes only and does not constitute financial or investment advice. Tax rules and legislation change frequently. Always verify current rates with HMRC or GOV.UK and seek independent professional advice before making investment decisions.