Buying a holiday let: stamp duty and its equivalents across the UK

Updated 27 September 2026. The purchase tax on a holiday let is paid once, on completion, and it cannot be recovered from guests. Since late 2024 all three UK property transaction taxes have raised the surcharge on additional homes, which has changed the arithmetic of buying a cottage or a city flat to let. This article sets out what each nation charges, the exceptions that matter and the questions to settle with your conveyancer before you make an offer.

Three taxes, one principle

Great Britain and Northern Ireland have three separate taxes on buying property. Stamp Duty Land Tax applies in England and Northern Ireland, Land and Buildings Transaction Tax in Scotland, and Land Transaction Tax in Wales. Each has standard rates for a buyer's only home and higher rates when the purchase is an additional dwelling. A holiday let bought by someone who already owns a home is almost always an additional dwelling, so the higher rates are the realistic starting point.

England and Northern Ireland: Stamp Duty Land Tax

The higher rates apply when you buy a residential property for £40,000 or more and, at the end of the day of purchase, you own more than one residential property worth £40,000 or more, without having replaced your main home. The surcharge rose to five percentage points on 31 October 2024. With the standard bands that have applied since 1 April 2025, the higher rates are:

• 5% on the portion up to £125,000;
• 7% from £125,001 to £250,000;
• 10% from £250,001 to £925,000;
• 15% from £925,001 to £1.5 million;
• 17% above £1.5 million.

Buyers who are not resident in the UK pay a further 2% surcharge on residential purchases in England and Northern Ireland, in place since 1 April 2021. Portfolio buyers should also note that Multiple Dwellings Relief, which once reduced the tax on buying several dwellings in one transaction, was abolished for transactions completing on or after 1 June 2024.

Scotland: the Additional Dwelling Supplement

In Scotland the surcharge is a flat supplement on the whole purchase price, not a banded rate. The Additional Dwelling Supplement is 8% for transactions from 5 December 2024, up from 6%, on top of the normal LBTT. It applies from a price of £40,000. On a typical cottage it is the single largest acquisition cost after the price itself, and it applies to holiday homes as much as to long-term rentals.

Wales: the higher residential rates

Wales raised its higher residential rates of Land Transaction Tax on 11 December 2024. They now run from 5% on the first £180,000 to 17% above £1.5 million, with bands at 8.5%, 10%, 12.5% and 15% in between. Given that Welsh holiday lets also face demanding business rates thresholds and council tax premiums of up to 300%, buyers should model the purchase tax and the annual local tax together.

When the higher rates do not apply

• Replacing your main home: if the property becomes your main residence and you have sold your previous one, the higher rates do not apply.
• Selling later: in England and Northern Ireland, if you sell your previous main home within three years of buying the new one, you can reclaim the surcharge; the claim has a time limit. Scotland gives 36 months to sell the previous main residence and claim the supplement back.
• Low values: properties under £40,000 are outside the surcharge in all three systems — a threshold in force since April 2016 for SDLT (Finance Act 2016, Sch. 4ZA para. 3, Condition A), and matched at the same figure in Scotland and Wales.

Buying a holiday let does not usually fit the first two situations, because the buyer keeps the family home. Couples should be careful: for these rules, what spouses and civil partners own is generally looked at together.

Five questions for your conveyancer

• Will the higher rates apply, given everything each buyer owns anywhere in the world?
• Is any part of the property non-residential, such as a separate commercial unit, and does that change the calculation?
• If buying through a company, which rates apply and what are the ongoing consequences?
• Does the price include furniture and equipment, and how is that portion treated?
• What are the deadlines for filing the return and paying?

The purchase tax is only the first check

A property that works on paper can still fail on use. Before exchange, confirm that the lease and title allow holiday letting, that your mortgage permits it, whether Scottish licensing or a control area applies, whether Northern Ireland certification is realistic, and whether English planning or London's 90-night rule will limit the letting pattern. Then check the council tax or business rates position, because the annual tax bill matters as much as the one-off purchase tax.

How we help

We do not give tax advice; a conveyancer or tax adviser should confirm the figures for your purchase. What we can do is test the letting side: how many nights are realistic, what rules apply at the address and what the property needs before its first guest. Tell us about the property you are considering; we study every request and tell you honestly whether and how we can help.