Buying a second home in the UK means facing the painful 3% Stamp Duty Land Tax (SDLT) surcharge—even if it’s a modest flat or a rental investment. But here’s the good news: there are completely legal strategies to reduce—or even eliminate—the surcharge altogether. These are the exact loopholes expert advisors at My Tax Accountant help their clients use every day.
✅ 1. Replace Your Main Residence — No Surcharge at All
If you’re selling your current main home and buying another, it doesn’t count as an “additional property.”
Even better—if you pay the surcharge because your old home hasn’t sold yet, you can get a full refund within 36 months once it sells.
✅ 2. First-Time Buyer + Spouse With a Property? Use a Declaration of Trust
If one partner already owns a property but the other doesn’t, buying in the name of the non-homeowner spouse can avoid the surcharge.
For extra protection and fair ownership, couples often use a Declaration of Trust or Form 17, with guidance from professionals like My Tax Accountant.
✅ 3. Buying Six or More Properties? Claim Non-Residential Rates
Buying multiple buy-to-lets in one transaction? Then HMRC treats it as a commercial purchase, meaning:
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No 3% surcharge
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Lower SDLT rates
This is known as “Multiple Dwellings Relief” — but it must be applied correctly, or HMRC will reject it.
✅ 4. Use a Limited Company — But Only If the Numbers Add Up
Buying via a limited company means you always pay the surcharge upfront.
But—unlike individuals—the company can fully deduct mortgage interest from rental profits.
For higher-rate taxpayers, this can save thousands every year—making the surcharge worth paying.
✅ 5. Property Worth Under £40,000? No Surcharge Applies
If the property is genuinely valued under £40,000 (excluding caravans, mobile homes, or houseboats), no SDLT or surcharge applies.
Ideal for:
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Low-value northern investment properties
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Shared-ownership rural holiday homes
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Parking spaces with separate title deeds
✅ 6. Inherit Less Than 50% of a Property? You’re Still Safe
If you inherit less than half of a property, HMRC does not count you as a property owner for SDLT surcharge purposes.
So, you can still buy a second home without triggering the extra 3%.
✅ 7. Buying to Replace a Main Residence Abroad? Still Eligible
If you are moving back to the UK, selling a main residence abroad and buying a new UK home, you can avoid the surcharge—as long as you can prove your previous property was your main residence.
💡 Final Thought: Don’t Pay More Than You Need To
HMRC rules are rigid—but full of legal reliefs, exceptions and timing strategies. Getting it wrong can cost tens of thousands. Getting it right can save the full surcharge.
For tailored advice, forms and HMRC submissions, speak to My Tax Accountant — the experts who help UK landlords and homeowners legally reduce their tax bills every day.
