Legal News | 16.06.25
Buying a Second Home? Here are the possible costs to expect
There are many reasons why you may want to think about purchasing a second home with the possibility to use the property as an investment or a holiday home. But before deciding to purchase a second home it is important to be informed about the possible extra costs that may arise when you own two properties, so they are not a surprise.
Stamp Duty Land Tax
SDLT is a tax that is paid when you buy property or land and the amount of SDLT that you have to pay increases as the price of the property increases. Please note that this article relates only to properties within England.
If you purchase a second home (when you already own or have an interest of £40,000 or more in another residential property anywhere in the world) then you are likely to be required to pay an additional 5% of SDLT on top of what you were already paying, as demonstrated by this table:
| Purchase price | SDLT for when you own one property | SDLT when you are purchasing a second home (in addition to your main residence) |
|---|---|---|
| Up to £125,000 | 0% | 5% |
| £125,001-250,000 | 2% | 7% |
| £250,001-£925,000 | 5% | 10% |
| £925,001-£1,500,000 | 10% | 15% |
| £1,500,000+ | 12% | 17% |
Therefore, if you are buying a property for £450,000 and this is your only property then the SDLT payable on this would be £12,500.
However, if you were purchasing an additional property for £450,000 when you already have a main home then the SDLT payable on this would be £35,000.
What if my spouse or child already owns or has an interest in property?
If you are married or in a civil partnership you are treated as a ‘unit’ for tax purposes, alongside any children under the age of 18. If your partner or child already owns or has an interest of £40,000 or more in another residential property (anywhere in the world), then you will still be required to pay the higher amount of SDLT if you are buying a new additional property, either together or on your own.
Stamp duty refunds
If you were to buy a second home and then sell your main property within three years of this purchase then you may be able to apply for a stamp duty refund (within strict timescales) for the 5% extra you paid which means you do not have to buy your new property and sell your current home simultaneously and there can be some overlap.
Council Tax
Another cost that you may have to consider when purchasing a second home is that of council tax this is because as of April 2025 local councils were given the ability to up to double the council tax for second homes (defined as furnished properties that are not your main home.)
This is an option which has been taken up by many councils with Sky News reporting that 75% of councils have plans to increase their council tax for second homes. Some of those councils include Cornwall Council, all the councils in Devon and Bristol City Council, which are all doubling the council tax. Although currently, this is not something that has been taken up by Wiltshire Council in relation to furnished second homes.
There are some notable exceptions that may mean you don’t have to pay the council tax premium for 12 months for example, if you have a grant of probate for the second home or the second home is being marketed for sale or rent.
There are several other exceptions which could mean you would not have to pay the council tax premium, such as if the house is provided by your employer and needed for your job or if the property has restrictions, meaning it cannot be your main home.
Normally, you need to apply with your council for an exception to apply.
Please keep in mind that both stamp duty and council tax liability can be complicated so if you would like further guidance, or if you are looking for a conveyancer to handle your property purchase or sale, please contact our Residential Property team at property@wansbroughs.com | 01380 733367.
