Updated for 2025/26. Stamp duty on a second home in south west London is now a materially larger cost than it was 18 months ago. The additional dwelling surcharge rose from 3% to 5% on 31 October 2024, and the standard nil-rate threshold reverted to £125,000 on 1 April 2025. Both changes apply to every band of the purchase price, and both have meaningfully increased the upfront tax payable on flats and houses across SW11, SW12, SW17 and SW18.
If you are weighing up a London pied-à-terre, a flat for a child studying or working in the capital, or a buy-to-let investment, the figures below set out exactly what is now payable in England and Northern Ireland.
Stamp Duty Land Tax (SDLT) is a tax payable by anyone in England or Northern Ireland buying a property costing more than £125,000. You pay the standard rate when the property is your main and only residence. Higher rates apply if you are buying a second home or are an overseas buyer.
How much you pay depends on the purchase price. SDLT is a banded tax: each portion of the price falls into a different rate band, and the rates rise as the price increases.
If you buy an additional residential property costing more than £40,000, you will pay the standard rates plus a 5% surcharge on every band. The surcharge increased from 3% to 5% on 31 October 2024 and applies to all completions on or after that date.
The surcharge captures buy-to-let properties, holiday homes, and any property bought as a gift, such as a flat for a child, where the deeds remain in your name. It also applies to companies and other non-natural persons buying residential property.
Yes. The 5% surcharge replaced the previous 3% rate on 31 October 2024 as part of the Autumn Budget. It was the most significant change to additional property taxation since the surcharge was introduced in April 2016. The flat rate paid by companies and other corporate entities on residential purchases over £500,000 also rose, from 15% to 17%.
For a main and only residence, no stamp duty is payable on the first £125,000. The rate is 2% on the portion between £125,001 and £250,000, 5% on the portion between £250,001 and £925,000, 10% on the portion between £925,001 and £1.5 million, and 12% on anything above £1.5 million.
For a second home or additional property, the 5% surcharge applies on top of every band. That means 5% on the first £125,000, 7% on the portion between £125,001 and £250,000, 10% on the portion between £250,001 and £925,000, 15% on the portion between £925,001 and £1.5 million, and 17% on anything above £1.5 million. The full SDLT calculator is available on the gov.uk website.
The average sold price in SW11 over the last 12 months is £905,103, which means most second home purchases in Battersea, Clapham, Wandsworth and Balham sit firmly in the 10% surcharge band. The 2% increase in the surcharge alone adds tens of thousands of pounds to a typical transaction.
For an £850,000 second home in Battersea, the total SDLT bill is £75,000. That breaks down as £6,250 on the first £125,000 at 5%, £8,750 on the next £125,000 at 7%, and £60,000 on the remaining £600,000 at 10%. Under the previous 3% surcharge and £250,000 nil-rate threshold, the same purchase would have attracted £55,500. The change represents a £19,500 increase on a single transaction.
For a £1.2 million second home in Wandsworth, the total SDLT bill is £123,750. That breaks down as £6,250 on the first £125,000 at 5%, £8,750 on the next £125,000 at 7%, £67,500 on the portion between £250,001 and £925,000 at 10%, and £41,250 on the remaining £275,000 at 15%.
At other common price points the picture is similar. A £400,000 second home attracts £27,500 in SDLT (against £7,500 for a main residence). A £600,000 second home attracts £50,000 (against £20,000). All figures are based on current 2025/26 rates.
Exemptions on second homes are limited. Properties worth less than £40,000 are exempt from the additional dwelling surcharge, but this is unachievable in south west London, where the average price across SW11 sits above £900,000. Mobile homes, caravans and houseboats are also exempt from SDLT.
By definition, first-time buyers cannot purchase a second home. A first-time buyer purchasing a buy-to-let pays the standard rates rather than the surcharge, as they will only own one property, but they will not qualify for first-time buyer relief on that purchase.
If a first-time buyer subsequently buys somewhere to live in, the surcharge will apply on the second purchase. Buying jointly with someone who already owns a property also triggers the surcharge on the entire transaction.
The surcharge applies even if your only other property is overseas, including holiday homes and timeshares.
Overseas buyers face a further 2% non-resident surcharge on top of all standard rates and the additional dwelling surcharge. A non-UK resident buying a second home in England therefore pays a combined surcharge of 7% on every band.
You do not pay SDLT when you inherit a property, but any subsequent purchase that leaves you owning two properties may trigger the surcharge.
If you have inherited 50% or less of a property, you may be exempt from the surcharge on a residential purchase made within three years of the inheritance. If you have inherited more than 50%, the surcharge will apply on any future purchase. More detail on the position of inherited property in south west London is available in our dedicated guide.
This is one of the most common scenarios for movers in south west London, particularly within the Nappy Valley upsize circuit between Clapham, Battersea and Wandsworth.
You will pay the 5% surcharge at completion if you still own your previous main residence on the day the new purchase completes. However, you can reclaim the full surcharge if you sell your previous main residence within 36 months of buying the new one.
To claim a refund, you will need a Government Gateway user ID and password, the SDLT transaction reference number, the completion date of the new purchase, and the sale date of the previous main residence. The repayment form is available on the gov.uk website. Refunds typically take 15 to 20 working days from a valid claim. The claim must be submitted within 12 months of selling the previous home, or 12 months of the SDLT filing date, whichever is later.
A property adjustment order made during divorce proceedings transfers ownership of the marital home to one party. The other party can then buy a new home without paying the surcharge.
Without a property adjustment order, the buyer of the new home pays the surcharge but may be able to reclaim it after subsequently selling their share of the former marital home.
If you already own a property and buy one for your children with the deeds in your name, the surcharge applies. Several routes can avoid this. You can act as guarantor for your child's mortgage so that the property is in their name only, gift a deposit to help them meet affordability criteria, or take out a family-offset mortgage that offsets your savings against your child's borrowing.
Each route has separate tax and legal implications worth taking professional advice on before committing.
Stamp duty is payable on lease extensions. You will not pay SDLT if the extension is on your main residence and costs less than £125,000. If the extension is on a second home and costs more than £40,000, the 5% surcharge applies. Our guide to freehold versus leasehold sets out the wider implications of leasehold ownership.
For SDLT purposes, married couples and civil partners are treated as a single unit. If either party owns a residential property, the surcharge applies to any additional purchase made by either of them.
Unmarried couples are treated separately. If only one party owns a property, the other can purchase a new home in their sole name without triggering the surcharge. This carries implications for the mortgage application, joint financial position, and what happens if the relationship ends.
If you are considering buying an additional property in Battersea, Clapham, Wandsworth, Balham, Tooting or Earlsfield, our team can talk through the tax position alongside the wider market context. Contact the team or book a free valuation if you are also considering selling.