Higher stamp duty on second homes and company purchases
In short
Schedule 4ZA contains the higher SDLT rules for certain home purchases in England and Northern Ireland. It includes extra homes and company purchases.
- The rules began on 1 April 2016.
- A new main home can still raise an issue if the old home remains owned.
- The detailed statutory test and transaction date matter.
Scroll down for the full analysis.
Read the original guidance here:
Higher stamp duty on second homes and company purchases
Higher stamp duty rates can apply when you buy a second home, a buy-to-let property, or a new home before selling your old one, and they can also apply when a company buys a home. As a result, the SDLT bill can change a lot.
What this rule is about
Stamp Duty Land Tax, usually called SDLT or stamp duty, applies to land purchases in England and Northern Ireland, while Schedule 4ZA is the part of the law dealing with higher rates for certain home purchases. That is the starting point.
These rules started on 1 April 2016, and their broad aim is simple: a purchase may face higher SDLT where it adds to a person’s home ownership rather than replacing the home they live in. It is not always straightforward.
What the official source says
HMRC’s introduction says that higher SDLT rates applied from 1 April 2016 to additional homes, such as second homes and buy-to-let properties, and it also covers a new main home where the old main home is still owned. Whether you still own the old home matters.
According to the introduction, company purchases of homes are within the higher-rates regime, while the law is Schedule 4ZA to the Finance Act 2003, inserted by the Finance Act 2016. That Schedule decides the result.
- An extra home can include a second home.
- An extra home can include a buy-to-let property.
- Buying a new home before selling the old main home can matter.
- A company buying a home can fall within the regime.
- The Schedule decides whether a purchase is a higher-rates transaction.
- The Schedule has changed since it first became law.
What this means in practice
Do not assume that calling a property your new main home ends the question, because the higher rates may be in point if you still own your old main home when the relevant purchase takes effect. Ownership at that point matters.
Likewise, do not assume that a company is treated like an individual buyer. Separate rules in Schedule 4ZA apply to company purchases.
- Check every home you own, not only the one you are buying.
- Check whether you will still own your former main home.
- Check the date on which the purchase takes effect.
- Where a company buys, use the company rules rather than the individual rules.
- Do not calculate tax from this introduction alone.
How to analyse it
Start with the facts on the relevant date, then work through the statutory route that matches the purchase, because the question is not simply, “Will I own two homes?” It is more detailed.
Decide whether the purchase meets the detailed conditions in Schedule 4ZA. Let the facts lead the way.
- Identify the buyer or buyers.
- Decide whether an individual or a company is buying.
- Identify the main property being bought.
- List other homes owned at the relevant time.
- Check whether an old main home has been sold.
- Match the facts to the relevant part of Schedule 4ZA.
- Check the law that applied on the transaction date.
Example
Amira buys a new house on 1 April but has not yet sold the flat where she has been living, and she may think the purchase is outside the higher rates because the house will become her main home. That may not be enough.
HMRC’s introduction highlights this exact type of situation: owning the old main home can bring the higher rates into the picture. Detailed Schedule tests and the dates decide the result.
Why this can be difficult in practice
Here is the part people get wrong: the introduction gives broad categories, while the legislation contains detailed tests that decide whether a particular purchase falls within the higher-rates regime. Everyday labels do not decide it.
Although “second home” is an everyday label, it is not a complete answer to the SDLT question. The legal test goes further.
HMRC’s manual is useful for showing the scope of the regime, but it is not the law itself; Schedule 4ZA is the legal source, and it has been amended since 2016. Check the version that applied.
- A new main home may still be caught while the old one remains owned.
- The result can turn on the precise purchase and sale dates.
- Company purchases have their own statutory route.
- The rules changed after their introduction.
- A historic purchase must be tested under the law then in force.
Key takeaways
- Higher SDLT rates began on 1 April 2016.
- Second homes, buy-to-let homes and company purchases can be affected.
- Buying before selling your old main home can be the key fact.
Technical analysis
For advisers, and for anyone who wants to check the law behind this page. You do not need this section to understand the guidance above.
Legislation
- FA 2003 Schedule 4ZA para 1 — applies the higher residential SDLT rate table
- FA 2003 Schedule 4ZA para 2 — explains when a purchase is a higher rates transaction
- FA 2003 Schedule 4ZA para 3 — sets the test for one home bought by an individual
- FA 2003 Schedule 4ZA para 4 — sets the test for one home bought by a company
- FA 2016 section 128 — inserted Schedule 4ZA into the Finance Act
- an Act of 2018 we do not have an identifier for Schedule 11 para 16 — provides when the 2018 Schedule changes took effect (no link: an Act of 2018 we do not have an identifier for)
Official guidance
The pages below are HMRC’s guidance. Guidance is not law. It sets out how HMRC reads the legislation, and it is not binding on you, on a tribunal or on a court. Where guidance and the legislation differ, the legislation wins. HMRC can also change or withdraw guidance, and it may not cover your facts.
Where this is not settled
- This introductory source does not set out the detailed conditions, exceptions or repayment rules.
- The source does not state a rate, so this page does not calculate any SDLT.
- A current answer for a particular purchase requires the version of the law in force on its effective date.
Evidence you would need
This kind of case is decided on the facts of the individual property. These are the records that usually settle it, and the ones an adviser would ask you for.
- the purchase date
- who is buying, including any company
- the homes each buyer owns on the relevant date
- whether an old main home has been sold
- the dates of any sale and purchase
Explore this with an AI
Readers often want to test their own situation. Copy the prompt below into ChatGPT, Claude or Gemini. It hands the model the actual legislation for this page rather than letting it answer from memory, and tells it to be explicit about what is uncertain. What comes back is information, not advice – check it against the links above.
I am researching UK Stamp Duty Land Tax (SDLT), which applies in England and Northern Ireland. MY QUESTION Higher stamp duty on second homes and company purchases [Replace this with your own situation: what you are buying, the price, the dates, who the buyer is, and what you plan to do with the property.] THE LAW THIS TURNS ON - FA 2003 Schedule 4ZA para 1 - applies the higher residential SDLT rate table https://www.legislation.gov.uk/ukpga/2003/14/schedule/4ZA/paragraph/1/2025-11-17 - FA 2003 Schedule 4ZA para 2 - explains when a purchase is a higher rates transaction https://www.legislation.gov.uk/ukpga/2003/14/schedule/4ZA/paragraph/2/2025-11-17 - FA 2003 Schedule 4ZA para 3 - sets the test for one home bought by an individual https://www.legislation.gov.uk/ukpga/2003/14/schedule/4ZA/paragraph/3/2025-11-17 - FA 2003 Schedule 4ZA para 4 - sets the test for one home bought by a company https://www.legislation.gov.uk/ukpga/2003/14/schedule/4ZA/paragraph/4/2025-11-17 - FA 2016 section 128 - inserted Schedule 4ZA into the Finance Act https://www.legislation.gov.uk/ukpga/2016/24/section/128 - an Act of 2018 we do not have an identifier for Schedule 11 para 16 - provides when the 2018 Schedule changes took effect Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09735 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. Guidance from HMRC is its view of the law, not the law, and does not bind a tribunal or a court. 2. Tell me what the rule actually requires, in plain English. 3. Tell me which facts decide the answer, and which facts would change it. 4. Tell me what evidence I would need to support the position. 5. Be explicit about anything unsettled or fact-sensitive. Do not guess. 6. Your training data has a cutoff and SDLT rates and reliefs change at fiscal events. Say so if you are not sure the law is current. POINTS ALREADY KNOWN TO BE UNCERTAIN ON THIS TOPIC - This introductory source does not set out the detailed conditions, exceptions or repayment rules. - The source does not state a rate, so this page does not calculate any SDLT. - A current answer for a particular purchase requires the version of the law in force on its effective date. Do not give me a conclusion you cannot support from the provisions above.
Legislation links show Finance Act 2003 as it stood on 2025-11-17. The law may have changed since, and the rules that apply are those in force on the date of your transaction. The official guidance this page is based on is here.
This page was last updated on 1 September 2026
Useful article? You may find it helpful to read the original guidance here: Higher stamp duty on second homes and company purchases
Search Land Tax Advice with Google
