Buy to Let: How much more Stamp Duty will you have to pay?


George Osborne sprang a surprise on property investors last week, when he announced in the Autumn Statement, that he will increase the Stamp Duty payable on the purchase of Buy to Let property and second homes.

From 6th April 2016, anyone purchasing a property to let, or as a second home, will see a surcharge of 3% added to each band of Stamp Duty payable.

The table below shows the rates of Stamp Duty currently payable and those which will be charged after the change:

[table id=1754 /]

The news will disappoint Buy to Let investors, who were unexpectedly hit by steps in the Summer Budget, to limit the amount of mortgage interest they will be able to offset against the rental income they receive.

The latest tax rise was criticised by many property experts who are concerned that it will lead to an increase in rents and possibly lower standard accommodation with landlords spending less on maintenance because of higher Stamp Duty costs. There is also concern that new developments will stall as the flow of ‘off plan’ Buy to Let investors dry up.

However, others have predicted that house prices could fall, which could help first time buyers, who are often competing with Buy to Let investors for the same property.

How much extra Stamp Duty will be payable?

The answer to that question depends of course on the price of the property you will buy.

The average price paid for a Buy to Let property is £184,000 and the new rules would see the Stamp Duty payable rise by £5,520 from April 2016.

A property purchased for £150,000 will attract an increase in Stamp Duty of £4,500, whilst someone buying at £450,000 will pay £13,500 more.


The Government believes the increase to Stamp Duty will raise an additional £1 billion by 2010, although it intends to undertake a brief consultation on the new rules before they are implemented in April next year.

It is expected that commercial property investors with more than 15 properties will be exempt from the new rules.

Meanwhile, property experts have called on the Government to look at other circumstances which may be caught by the new tax. For example, buyers who are bridging from one property to another in order to break a chain may be caught by the new rules, as could people who do not currently own their main residence, but do have a one or more Buy to Let properties.

We’re here to help

If you would like to understand more about how the new rules may affect you, we are here to help.

Call Sarah or Bev on 0115 933 8433 or email

Please note, the FCA does not regulate Buy to Let property investments.