Thinking about buying a second home? Whether it’s a holiday hideaway, a buy-to-let investment, or a way to help a family member onto the property ladder, owning more than one property can be exciting. But there are some important rules for buying a second home in the UK that you’ll need to understand first. From higher stamp duty rates to capital gains tax, the costs and responsibilities are different from buying your first home. In this guide, we’ll break it all down clearly, so you know what to expect and how to plan ahead.
When you buy a second property, there are some extra costs you’ll need to factor in:
Stamp Duty Land Tax (SDLT) applies in England and Northern Ireland, while Scotland uses Land and Buildings Transaction Tax (LBTT), and Wales uses Land Transaction Tax (LTT).
For second homes, you’ll pay a higher rate than on your main residence. Exactly how much depends on where in the UK you’re buying and the property’s value.
If you sell your second home for more than you paid, you may need to pay capital gains tax (CGT) on the profit above your allowance. The current allowance is £12,000 per person. The rate depends on your income tax band: up to 18% for basic-rate taxpayers or up to 28% for higher-rate taxpayers.
Council tax is also payable on second homes. If you let the property out, your tenants will usually be responsible. Rules vary depending on how long the property is empty or whether you’re renovating it. For example, some councils can charge up to 150% of the standard rate if a second home is left empty for over two years.
Your reasons for buying a second property will shape the rules and costs that apply to you. Common reasons include:
A holiday home in the UK or abroad
A buy-to-let investment
Property development for resale
Helping a relative onto the property ladder
Building long-term wealth by diversifying your assets
Buy-to-let is one of the most popular reasons people buy a second property. It can provide extra income and long-term growth, but you’ll need a buy-to-let mortgage.
Higher fees and interest rates
A deposit of at least 20–25% (sometimes up to 40%)
Many are interest-only, meaning you repay the loan in full at the end of the term
If you already own a second home on a standard mortgage and want to rent it out, you’ll need to remortgage to a buy-to-let deal.
If you’d love a regular retreat, a holiday home could be a good option. You may even rent it out when you’re not using it.
For longer-term holiday rentals, you may need a “holiday let” mortgage.
For short-term letting, a standard residential mortgage may be enough. Be aware that income from holiday lets is taxable. If you rent out your holiday home for more than 105 days a year, you might qualify for certain tax reliefs.
Some people buy a second property to help their children or relatives buy their first home. If the property is in your name, it will still count as a second home and attract higher stamp duty. Putting the property fully in the first-time buyer’s name can reduce costs, but you’d need to be comfortable not having a legal claim on it.
The rules for buying a second home vary slightly depending on where you’re purchasing:
England & Northern Ireland – Stamp Duty Land Tax (SDLT) applies, with a 3% surcharge on additional properties.
Scotland – You’ll pay Land and Buildings Transaction Tax (LBTT), with a 4% surcharge on additional properties.
Wales – You’ll pay Land Transaction Tax (LTT), with a 4%+ surcharge depending on property value.
Most buyers will need a second mortgage. Lenders will look for:
A deposit of at least 25%
Proof you can afford both mortgages
Expected rental income (for buy-to-let)
A good credit score and repayment history
You can check your credit score for free with ClearScore and see if you’re in a good position for a mortgage application. You may also be able to remortgage your current home to release equity and use this as the deposit on your second property.
The mortgage market is complex, especially when it comes to second homes. That’s why it helps to compare options.
Key takeaway: The rules for buying a second home mean you’ll pay extra stamp duty, possibly capital gains tax, and higher council tax. But with the right mortgage and a clear plan, a second home can be a smart way to invest, earn income, or support your family.