TL;DR: Buying a second home in the UK means paying a higher rate of Stamp Duty Land Tax (or the Scottish or Welsh equivalent), facing stricter mortgage criteria including a typical deposit of 25 percent or more, and accepting that the second property will be subject to capital gains tax on any future sale because only one home at a time can be the "main residence" for tax purposes. The choice between a residential second-home mortgage and a buy-to-let mortgage depends on the intended use: occasional family use and holidays sit under a second-home residential mortgage, while letting the property out to tenants requires a buy-to-let mortgage. Council tax can be charged at a higher rate on second homes in many parts of the UK from April 2025.
Last reviewed May 2026
A second home is a property bought in addition to a main residence, intended for personal use such as a holiday home, a weekday flat near work, or a property for a family member to live in. The legal and tax framework differs from a buy-to-let purchase (where the property will be rented to tenants) and from a main home replacement (where the new property replaces the existing main home).
This guide covers the additional tax cost at purchase, the mortgage criteria for a second residential property, the council tax position, the capital gains tax position on a future sale, the income tax position if the property is occasionally let, and the practical decisions a second-home buyer faces.
The additional stamp duty rates on second homes
HMRC applies a higher rate of Stamp Duty Land Tax (SDLT) to second homes in England and Northern Ireland. From 31 October 2024 the additional rate for a second residential property is 5 percent on top of the standard SDLT rates, replacing the previous 3 percent surcharge. The surcharge applies to the full purchase price, not just the portion above a threshold.
Scotland's Land and Buildings Transaction Tax (LBTT) has an Additional Dwelling Supplement of 8 percent (raised from 6 percent in December 2024) on second homes. Wales's Land Transaction Tax (LTT) has a higher residential rate structure on second homes that mirrors the surcharge approach, with the rates set by Welsh Ministers and revised periodically.
The surcharge is calculated by the buyer's solicitor and paid at completion alongside the standard rates. A purchase is treated as a "second home" if, at the end of the day of completion, the buyer owns two or more residential properties anywhere in the world and is not replacing a main residence. Buyers who sell their previous main residence within 3 years of buying the new one can claim a refund of the surcharge.
Mortgages on a second residential property
A second-home residential mortgage is for a property the buyer or the buyer's family will occupy. The criteria are stricter than for a first home: most lenders require a deposit of 25 percent of the property value (so a 75 percent loan-to-value mortgage) and apply an income-based affordability assessment that considers both the existing mortgage on the main residence and the new one.
The lender will want evidence that the property is genuinely for personal or family use and not being let to tenants. The mortgage offer will usually include a clause restricting letting; breaching the clause can trigger a default. Buyers who intend to let the property at all need a buy-to-let mortgage instead, with different criteria (typically based on the rental income covering 125-145 percent of the mortgage interest at a stressed rate).
Affordability for two mortgages is the most common reason a second-home application is declined. The lender stress-tests both monthly payments against the household's income. A household with substantial equity in the main residence but moderate income often struggles, which is why some buyers release equity from the main residence (through a further advance or remortgage) to reduce the second-home loan size.
Council tax on second homes from April 2025
The Levelling-up and Regeneration Act 2023 gave English local authorities the power to charge up to 100 percent additional council tax (a "second home premium") on furnished properties not used as a main residence. From 1 April 2025 most councils that adopted the premium are charging the full 100 percent uplift, doubling the council tax bill on second homes in the area.
Scotland gave councils a similar power from April 2024 and many councils in tourist areas have applied a 100 percent premium. Wales has had a second-home council tax premium framework since 2017 and many Welsh councils now charge 100-300 percent additional council tax on second homes, depending on local policy. Council tax registration is the buyer's responsibility from the day the property completes.
The premium applies to properties that are furnished and not a main residence. A property that is unfurnished and unoccupied falls under different rules (and may be exempt for a limited initial period). Local authority websites publish the local position and the exemption categories that apply.
Capital gains tax on the future sale
The main residence is exempt from capital gains tax (CGT) through Private Residence Relief while it is the owner's only or main home. A second home does not get this relief. On a future sale, the gain (sale price minus purchase price minus allowable costs) is subject to CGT at the residential property rate (currently 24 percent for higher and additional-rate taxpayers, 18 percent for basic-rate taxpayers within the unused basic rate band) after the annual exempt amount.
An owner with two properties can elect which one is treated as the main residence for CGT purposes. The election must be made within 2 years of the second property being acquired (or of any change in property circumstances that opens a new 2-year window). The election can be varied later, and there are planning opportunities around the election for couples who married after acquiring the properties.
Where the property has been let at any point, the calculation becomes more complex: the gain is split between the period of residence (eligible for relief) and the period of letting (not eligible, except for a narrow letting-relief category that now applies only in very limited circumstances). A capital gains tax adviser or accountant should model the position before a sale.
Income tax if the second home is occasionally let
A second home let occasionally (for example, on Airbnb for a few weeks in the summer) generates rental income that is taxable. The income can fall into one of three regimes: ordinary residential letting (taxed under property income rules with restricted finance-cost relief), the rent-a-room scheme (only applies to letting in the main residence, not a second home), or the Furnished Holiday Lettings regime if the property meets the qualifying tests.
Furnished Holiday Lettings (FHL) treatment was abolished from 6 April 2025. Properties that previously qualified as FHL now fall under the standard property income rules. The change removed the previous advantages of FHL status (full mortgage interest relief, business asset disposal relief on sale, capital allowances on furniture) for second homes that were let to short-term guests.
Letting any property in the UK to short-term guests can also trigger planning, licensing and safety obligations (gas safety certificates, electrical safety, smoke alarms). Scotland introduced a short-term lets licensing scheme that requires a licence for short-term lets. Wales has consulted on similar measures. Local authority planning rules in some areas of England now restrict short-term letting.
Insurance, mortgage and ongoing costs
A second home needs buildings insurance (and, usually, contents insurance for the furniture). Insurers price second-home cover at a higher premium than a main residence because the property is unoccupied for longer periods, which raises the risk of undetected water leaks, theft and storm damage. Many policies require the property to be inspected weekly during unoccupied periods or to have specific alarm and heating arrangements.
Other ongoing costs include the mortgage interest, council tax (often at the higher premium rate), utilities (with standing charges accruing even when the property is empty), maintenance, and any service charge if the property is a flat. A buyer should model the full annual running cost before deciding whether the purchase fits the household budget.
The decision: buy versus rent versus equity release
For many households, a second home is a lifestyle decision more than a financial one. The total cost over a typical 10-year hold (purchase costs including the SDLT surcharge, mortgage interest, council tax, insurance, maintenance, and the eventual capital gains tax bill on sale) often exceeds the cost of renting the same property for the same number of weeks each year. The capital appreciation may or may not offset the running cost.
Alternatives include renting holiday properties in different locations, buying jointly with family members (which creates its own tax complications around connected-person rules), or releasing equity from the main residence later in life through a lifetime mortgage to fund retirement spending. None of these is universally better; the right answer depends on the household's circumstances, the intended use of the property, and the household's tolerance for the additional administrative burden of a second property.
How we verified this
This article reflects HMRC's published guidance on SDLT including the higher rates for additional dwellings, Revenue Scotland's LBTT and Additional Dwelling Supplement guidance, the Welsh Revenue Authority's LTT guidance, the Levelling-up and Regeneration Act 2023 for the council tax premium, HMRC's capital gains tax manual for the Private Residence Relief and main-residence election rules, the FCA's MCOB sourcebook for the residential and buy-to-let mortgage frameworks, and HMRC's guidance on the abolition of the Furnished Holiday Lettings regime from April 2025. Specific rates and thresholds change at each budget; the linked primary sources hold the current position.
Disclaimer: This article is general information about buying a second home in the UK. It is not personal financial, mortgage or tax advice. Individual circumstances determine the right approach, and the rates, surcharges and reliefs change. Anyone planning a second-home purchase should take advice from an FCA-authorised mortgage broker and a tax adviser before committing.
Frequently asked questions
How much stamp duty do I pay on a second home?
In England and Northern Ireland, a buyer of a second residential property pays the standard SDLT rates plus a 5 percent surcharge on the full purchase price (as set from 31 October 2024). Scotland charges an 8 percent Additional Dwelling Supplement under LBTT. Wales applies a higher residential rate structure under LTT. The buyer's solicitor calculates the bill and pays it within the filing window after completion.
Can I get a mortgage on a second home?
Yes, lenders offer second-home residential mortgages. Most require a deposit of 25 percent or more, apply affordability tests that include the existing mortgage on the main residence, and restrict letting under the mortgage terms. A buyer intending to let the property to tenants needs a buy-to-let mortgage instead, with different criteria.
Will I pay extra council tax on a second home?
Likely yes. From April 2025 most English local authorities apply a 100 percent second-home premium on furnished properties not used as a main residence, effectively doubling the council tax. Scotland and Wales have similar premiums applied by many local authorities. The premium and any exemptions are set locally; the council's website holds the position for the property's area.
Do I pay capital gains tax when I sell a second home?
Yes, on the gain (sale price minus purchase price minus allowable costs), at the residential CGT rate, after the annual exempt amount. The main residence is exempt from CGT through Private Residence Relief, but a second home is not. An owner with two properties can elect which one is treated as the main residence, within 2 years of the second property being acquired.
Can I let my second home occasionally?
Yes, but the rental income is taxable, the mortgage may restrict letting (a buy-to-let mortgage is needed if letting is significant), the Furnished Holiday Lettings regime ended in April 2025 so the previous tax advantages no longer apply, and short-term letting can trigger licensing or planning obligations depending on the location. The buyer should check the mortgage terms and the local authority's rules before letting.
