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Thinking of buying a second home but want to know if you have to pay second home tax? Look no further. Whether it’s a holiday home or a long-term investment property, you will most likely have to pay second home tax.
The tax implications may differ from your main residence, which is why it can be a little confusing – but don’t worry, we’ll break it down for you!
You will have to pay tax on most second homes, regardless of what it is used for or how you came to own it. As long as it is not your main residence, it will most likely qualify for second home tax – this includes;
There are four different types of taxes you may be liable to pay (pretty steep, we know). Some are dependent on what your second home is used for.
In the U.K, the most common tax to pay when buying a home is Stamp Duty. The amount you pay is based on the value of the property.
Stamp duty land tax (SDLT) rates in the current tax year, 2025/26 👇
| Buyer type | Property value | Tax rate |
| First time buyer | Up to £425,000 | 0% |
| £425,000 – £925,000 | 5% | |
| Non-first time buyer | Up to £250,000 | 0% |
| £250,000 – £925,000 | 5% | |
| All buyers | £925,000 – £1.5m | 10% |
| £1.5m+ | 12% |
If you’re buying an additional property (i.e. landlords, holiday properties), you’ll pay an extra 5% SDLT on the above rates.
Try our stamp duty calculator to work out how much you owe.
Council tax is another tax that you may have to pay on your second home. Luckily, some councils offer discounts on second homes if you don’t live there all year round. This varies from council to council, so be sure to check with them directly! You can find contact details for your local council here.
If you rent out your second home, you will have to pay Income Tax. How much tax you pay depends on how much profit you gain from your rental property, as well as any other income.
The income tax rates in the 2025/26 tax year 👇
| Income | Tax rate | Tax band |
| Up to £12,570 | 0% | Personal allowance |
| £12,571 to £50,270 | 20% | Basic rate |
| £50,271 to £125,140 | 40% | Higher rate |
| over £125,141 | 45% | Additional rate |
You will only pay Capital Gains Tax (CGT) if you decide to sell your property. The profit you make from this sale will be taxed in line with the rest of your income.
Not all second homes will incur second home tax. For example, you can dodge stamp duty (legally, of course) or you may even be entitled to a stamp duty refund if:
A person can only have one main residence. For tax purposes, married couples and civil partners who live together can also only have one main residence.
Patricia and Liam are ready to start a new chapter together! 🏡. Although this is their first home together, Patricia already owns a home. As they are making a joint application, their new home will be considered a second home.
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