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Does the stamp duty holiday apply to second homes?

Does the stamp duty holiday apply to second homes?
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There hasn’t been much good news in 2020. But in July 2020, homebuyers got some in the form of a stamp duty holiday until 31 March 2021. However, if you are buying a second home does the stamp duty holiday still apply?

We break down what the tax saving actually is. And if you are buying a second home, how you can benefit from it.

What is the stamp duty holiday?

In July 2020, Chancellor Rishi Sunak announced that the stamp duty tax threshold was being temporarily raised until next March. The outcome is that home buyers in England and Northern Ireland don’t have to pay stamp duty on properties worth up to £500,000. That is a savings of thousands of pounds for many.

Stamp duty usually applies to those buying properties worth £125,000 or more in value. Dfferent rules apply to first-time buyers and they are usually only required to pay stamp duty on properties worth over £300,000.

Does it apply to second homes?

The good news is that yes, the stamp duty holiday does apply to second homes. The main driving force behind the change was to stimulate the housing market following the coronavirus pandemic. Due to uncertain economic times, the government wanted to provide relief for the hard-hit property market.

And by including second homes, it has done just that. Until 31 March 2021, if you are buying a second property or a property on a buy-to-let basis, you will benefit from the raised tax threshold.

However, you will still have to pay the stamp duty surcharge which applies to second homes.

What is the second home surcharge?

Anyone buying an additional property, such as a second home or a buy-to-let property, is required to pay an extra 3% in stamp duty on top of the revised rates. This applies to all properties that are valued at more than £40,000, and operates on a sliding scale.

The percentage charged applies only to the part of the property price falling within each band.

Portion of property Stamp duty rate
£0 – £500,000 3%
£500,001 – £925,000 8%
£925,001 – £1.5m 13%
Over £1.5m 15%

To break it down, someone buying a second home worth £150,000 stands to save £500 with the new stamp duty thresholds.

Going further, the higher the value of the second property, the larger the saving. So someone buying an additional property worth £500,000 would actually halve their tax bill from £30,000 to £15,000.

As a side note, the surcharge doesn’t apply to caravans, mobile homes or houseboats.

Can you get a stamp duty refund?

There are some buyers that end up paying the second home surcharge when they don’t necessarily need to.

For example, if you are buying a new main property, but the sale of your other main property is delayed, there could be a period of time where you own two properties. If this is the case then you would be expected to pay the surcharge.

However, if you then sell or give away your previous main home within three years of buying your new home, you can apply for a refund of the second home surcharge on your stamp duty bill. The refund form can be found at


If you are looking to buy a second property, you could save yourself thousands of pounds if you do so before the stamp duty holiday ends in March 2021.

If you are planning to use a mortgage to fund the purchase of your second home, make sure you get the right one. Check out our complete guide to mortgages for more information.

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