When the 2% non-resident stamp duty surcharge can apply
Non-resident SDLT surcharge
The 2% surcharge can apply to a non-resident buyer’s qualifying purchase of a home interest. It does not apply simply because a buyer lives abroad.
- Check the property interest and lease length.
- Check the £40,000 or annual-rent test.
- Check each buyer’s statutory residence position.
Scroll down for the full analysis.
Read the original guidance here:
When the 2% non-resident stamp duty surcharge can apply
The 2% non-resident stamp duty surcharge may apply where a non-resident buyer purchases a qualifying home interest in England or Northern Ireland. Non-residence alone is not decisive. The property type, lease length and amount paid also matter.
What this rule is about
SDLT means stamp duty land tax. Where a transaction counts as non-resident, the law adds 2% to each relevant SDLT rate. This can make a large difference to the bill.
The rule does not cover every property deal involving a person who lives abroad. It has a gateway test. First, Schedule 9A must cover the purchase.
This is the point people often miss: a short lease can take a purchase outside the surcharge, even where a buyer is non-resident.
What the official source says
HMRC’s manual explains that the surcharge applies to a purchase of a major interest in one or more homes.
In everyday terms, this means freehold ownership or a leasehold interest in a home. It also includes a share of such an interest.
The manual says all of these points must be satisfied:
- the purchase is of one or more homes, whether or not other property is included too;
- at least one buyer is non-resident for this transaction;
- at the start of the effective date, the interest bought is not a lease with seven years or less left to run; and
- the minimum-value test is met.
The effective date will usually be completion. Sometimes, SDLT rules make it earlier. Check rather than assume.
For a purchase with no rent, £40,000 or more meets the minimum-value test.
For a lease with rent, the test is met if either the amount paid other than rent is £40,000 or more, or the annual rent is £1,000 or more.
- If rent stays the same, annual rent means the average annual rent over the lease term.
- If the rent changes and the amounts are known on the effective date, HMRC says to use the average annual rent for the period when the highest known rent is payable.
- A lease with only four years left is outside this surcharge test.
- A lease with eight years left can be within it, if the other conditions are met.
HMRC also says that a purchase of wholly non-residential property is not a non-resident transaction. An ordinary mixed-property purchase is generally outside it too.
The manual identifies limited exceptions. These cover some transactions involving more than one home and a higher-threshold interest.
What this means in practice
Start with what you are buying, rather than where you live. A non-resident buyer may still fall outside this surcharge if the interest is too short, the deal is below the minimum value, or the property is outside the scope described above.
Equally, describing land as commercial will not settle the matter. What the transaction includes matters.
- Check whether the deal includes a home, rather than only business property.
- Check every buyer’s residence position under the relevant Schedule 9A test.
- For a lease, count the years remaining on the effective date, not the lease’s original length.
- Separate the premium or other amount paid from rent.
- Read the rent review clauses if the lease rent changes over time.
- Do not assume a mixed-property label gives a complete answer.
If your conveyancer has said that the non-resident surcharge applies, ask why.
Ask which gateway test they used. That question can quickly expose a wrong assumption.
How to analyse it
Work through the questions in order. It is easier to spot an issue before calculating SDLT.
- What is the effective date of the transaction?
- Does the interest bought amount to freehold or leasehold ownership of one or more homes?
- Is any lease interest left with more than seven years to run at that date?
- Is at least one buyer non-resident under the applicable statutory test?
- Is the amount paid at least £40,000 where there is no rent?
- Where there is rent, is the non-rent amount at least £40,000 or is annual rent at least £1,000?
- Is this wholly non-residential or mixed property, and does an exception identified by HMRC need checking?
Answer those questions before applying the 2% addition to the relevant SDLT rates. The surcharge adds to rates; it is not a separate flat tax on the full price.
Example
Amir is non-resident for the transaction. He buys the remaining eight years of a lease of a flat. He pays a £45,000 premium and no rent.
The interest has more than seven years left and the amount paid reaches £40,000. On these facts, the transaction meets the property, lease-length and minimum-value parts of HMRC’s description.
If Amir also meets the statutory non-residence test, the 2% addition applies to the relevant SDLT rates.
Change one fact. If the same lease had only four years left on the effective date, HMRC’s manual says the surcharge would not apply. Its original lease term would not save the charge.
Why this can be difficult in practice
Lease documents can make a simple-looking test less simple. The effective date is key. Rent calculations may depend on amounts known then.
Residence is also a separate question. This page does not set out the detailed tests for people, companies or special cases. Schedule 9A contains those rules.
- Buyers sometimes use the lease’s original term instead of its remaining term.
- A low premium does not end the question if the lease includes rent.
- A high rent for a known part of the lease can affect the annual-rent test.
- One non-resident buyer may be enough to meet this limb of the test.
- Mixed property needs more than a label from an estate agent or contract heading.
- HMRC’s manual explains its view, but it does not replace the legislation.
The supplied legislation is recorded only up to 17 November 2025. For a later transaction, check the current official text before relying on this result.
Key takeaways
- The non-resident surcharge adds 2% to relevant SDLT rates.
- A qualifying home interest, lease length and minimum value are all part of the test.
- For leases, use the years left on the effective date.
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 section 75ZA — adds 2% to rates for non-resident transactions
- FA 2003 section 119 — defines the effective date of a land transaction
- FA 2003 Schedule 9A para 2 — defines transactions caught by the non-resident surcharge
- FA 2003 Schedule 9A para 3 — sets residence tests for individual buyers
- FA 2003 Schedule 9A para 7 — sets the residence test for company buyers
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
- The correct residence test depends on whether the buyer is an individual, company or falls within a special rule in Part 5 of Schedule 9A.
- Mixed-property cases may need careful review, especially where the transaction includes more than one home or a historic claim for multiple dwellings relief.
- The supplied statutory text is current only to 17 November 2025. Current-law verification is needed for a transaction after that 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 completion date and any earlier date that could be the effective date
- The contract, transfer or lease and the property description
- The lease term remaining on the effective date
- The price, any rent and the rent schedule
- Details needed to test each buyer’s residence status
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 When the 2% non-resident stamp duty surcharge can apply [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 section 75ZA - adds 2% to rates for non-resident transactions https://www.legislation.gov.uk/ukpga/2003/14/section/75ZA/2025-11-17 - FA 2003 section 119 - defines the effective date of a land transaction https://www.legislation.gov.uk/ukpga/2003/14/section/119/2025-11-17 - FA 2003 Schedule 9A para 2 - defines transactions caught by the non-resident surcharge https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/2/2025-11-17 - FA 2003 Schedule 9A para 3 - sets residence tests for individual buyers https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/3/2025-11-17 - FA 2003 Schedule 9A para 7 - sets the residence test for company buyers https://www.legislation.gov.uk/ukpga/2003/14/schedule/9A/paragraph/7/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09860 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 - The correct residence test depends on whether the buyer is an individual, company or falls within a special rule in Part 5 of Schedule 9A. - Mixed-property cases may need careful review, especially where the transaction includes more than one home or a historic claim for multiple dwellings relief. - The supplied statutory text is current only to 17 November 2025. Current-law verification is needed for a transaction after that 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 31 August 2026
Useful article? You may find it helpful to read the original guidance here: When the 2% non-resident stamp duty surcharge can apply
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