SDLT Non-Resident Surcharge 2026 -- 2% Extra on UK Property for Overseas Buyers

Last reviewed: 26 April 2026

The SDLT non-resident surcharge is a 2% premium on Stamp Duty Land Tax (SDLT) applied to all purchases of UK residential property in England and Northern Ireland by non-UK-resident buyers, introduced by Finance Act 2021 with effect from 1 April 2021. The surcharge was introduced to dampen overseas investment in UK residential property at a time of rising UK house prices and affordability pressures for UK-resident buyers; it applies regardless of whether the buyer is purchasing as a primary residence or as an investment. For UK expats considering purchasing UK residential property while living abroad, the SDLT non-resident surcharge significantly increases the purchase cost. For the full UK property investment context, see our UK expat property guide. For the UK tax residency rules that determine non-UK-residency for SDLT purposes (which differs from the SRT income tax test), see our UK tax residency guide.

An important Autumn Budget 2025 change affecting landlords who purchase UK property subject to the SDLT non-resident surcharge: the Autumn Budget 2025 OOTLAR announced that rental income from UK residential property will be taxed at separate, higher rates from 6 April 2026. From that date, UK rental income is taxed at 22% basic rate (was 20%), 42% higher rate (was 40%), and 47% additional rate (was 45%) per the OOTLAR at gov.uk. This change significantly increases the tax cost of UK residential property as an investment for higher-rate taxpayers; combined with the SDLT non-resident surcharge on purchase and the existing mortgage interest credit restriction (Finance (No. 2) Act 2015), UK buy-to-let investment by non-resident landlords is materially more expensive from 2026 than in prior years. HMRC’s SDLT Manual (gov.uk/hmrc-internal-manuals/sdlt-manual) and the specific non-resident surcharge guidance at gov.uk/guidance/stamp-duty-land-tax-rates-non-uk-residents are the authoritative references.

How non-UK-residency is determined for SDLT purposes

Non-UK-residency for SDLT non-resident surcharge purposes is assessed under HMRC’s SDLT-specific 183-day test, which is different from the Statutory Residence Test used for income tax. For SDLT purposes, a buyer is UK-resident if they have been present in the UK for at least 183 days in any continuous 12-month period in the 12 months before the completion date of the property purchase. A buyer who has not been present in the UK for 183 days in any such 12-month window is a non-UK-resident for SDLT purposes and is subject to the 2% surcharge. The 183-day test uses presence, not working days; any day on which the buyer is physically present in the UK at any time counts towards the 183 days. Where a buyer is jointly purchasing with a UK-resident co-buyer, both parties must be UK-resident for the non-resident surcharge to be avoided; if any buyer in a joint purchase is non-UK-resident, the 2% NRS applies to the whole purchase. HMRC’s SDLT guidance at gov.uk/guidance/stamp-duty-land-tax-rates-non-uk-residents confirms the 183-day test and the joint purchaser rule.

SDLT calculation for non-resident buy-to-let purchases in England

The SDLT calculation for a non-UK-resident purchasing a UK residential buy-to-let property in England involves three layers: the standard SDLT rate, the 3% Additional Dwelling Surcharge (ADS), and the 2% Non-Resident Surcharge (NRS). Standard SDLT rates in England for 2025/26 (gov.uk/stamp-duty-land-tax/residential-property-rates): 0% on the first £125,000; 2% on £125,001-£250,000; 5% on £250,001-£925,000; 10% on £925,001-£1.5m; 12% above £1.5m. The 3% ADS applies where the buyer already owns a residential property (anywhere in the world); the 2% NRS applies where the buyer is non-UK-resident for SDLT purposes. On a £350,000 residential property purchase by a non-UK-resident who already owns another property: standard SDLT = (0% x £125,000) + (2% x £125,000) + (5% x £100,000) = £2,500 + £5,000 = £7,500; ADS (3% of £350,000) = £10,500; NRS (2% of £350,000) = £7,000; total SDLT = £25,000 (7.1% of the purchase price). For a first-time buyer who is non-UK-resident (no ADS): standard SDLT £7,500 + NRS £7,000 = £14,500 (4.1%) -- note that the first-time buyer SDLT relief (nil rate on first £300,000 for purchases below £500,000) is not available to non-UK-residents.

Refund of SDLT non-resident surcharge: the 24-month return window

A buyer who pays the 2% SDLT non-resident surcharge at the time of purchase may claim a refund if they subsequently become UK-resident within the 24-month period starting 12 months before the completion date and ending 12 months after. The refund claim is available where the buyer meets the 183-day UK presence test in any continuous 12-month period within that 24-month window after completion. HMRC’s surcharge refund guidance at gov.uk confirms the refund procedure; the refund is claimed using HMRC’s online SDLT surcharge refund form. UK nationals who are planning to move back to the UK within 12 months of a property purchase abroad (for example, those on a fixed-term overseas assignment who intend to return) should be aware of this refund window. The refund is processed by HMRC and credited to the buyer; there is no interest payable on the refund for the period between payment and refund. The 24-month window is measured from the effective date of the transaction (usually completion date), not from the SDLT return filing date.

Scotland: LBTT non-resident surcharge

Scotland has its own property transaction tax (Land and Buildings Transaction Tax, LBTT) administered by Revenue Scotland (revenue.scot). LBTT replaced SDLT in Scotland from 1 April 2015. Revenue Scotland introduced a non-resident buyer supplement for residential properties in Scotland, equivalent to the England and Northern Ireland SDLT non-resident surcharge; the supplement applies to non-Scottish-resident buyers at the same rate as the England non-resident surcharge (2% of the total consideration). LBTT standard residential rates in Scotland (Revenue Scotland, revenue.scot/land-and-buildings-transaction-tax): 0% on £0-£145,000; 2% on £145,001-£250,000; 5% on £250,001-£325,000; 10% on £325,001-£750,000; 12% above £750,000. The Additional Dwelling Supplement (ADS) in Scotland is 6% of the total consideration (higher than England’s 3% ADS) for buyers who already own a residential property. On a £350,000 Scottish property for a non-resident buyer who already owns another property: standard LBTT £17,850 + ADS (6% x £350,000) £21,000 + non-resident supplement (2% x £350,000) £7,000 = £45,850 (13.1%). Scotland’s higher ADS rate makes Scottish property purchases significantly more expensive for overseas investors than equivalent England purchases.

Wales: Land Transaction Tax (LTT)

Wales has its own property transaction tax (Land Transaction Tax, LTT) administered by the Welsh Revenue Authority (WRA, gov.wales/land-transaction-tax). LTT applies to property purchases in Wales from 1 April 2018. Wales does not currently have an explicit non-resident buyer LTT surcharge equivalent to England’s 2% NRS; however, the Welsh Additional Rate applies to purchases of additional residential properties at a rate of 4% of the total consideration (higher than England’s 3% ADS). LTT standard residential rates in Wales: 0% on £0-£225,000; 6% on £225,001-£400,000; 7.5% on £400,001-£750,000; 10% on £750,001-£1.5m; 12% above £1.5m. On a £350,000 Welsh property for a non-UK-resident buyer who already owns another property: standard LTT £7,500 + Additional Rate (4% x £350,000) £14,000 = £21,500 (6.1%) -- lower than England and significantly lower than Scotland for the same purchase. Wales’ absence of a specific non-resident surcharge makes Welsh property slightly more accessible to non-resident investors compared to English property of the same value.

New Autumn Budget 2025 rental income tax rates

The most significant Autumn Budget 2025 change for non-resident UK property buyers is the introduction of higher rental income tax rates for UK residential property from 6 April 2026. Per the OOTLAR (gov.uk/government/publications/autumn-budget-2025-overview-of-tax-legislation-and-rates-ootlar): basic rate rental income tax increases from 20% to 22%; higher rate from 40% to 42%; additional rate from 45% to 47%. These separate rates (higher than the standard income tax rates for other income) apply only to UK residential rental income and represent a significant increase in the tax cost of UK buy-to-let investment. For non-resident landlords already subject to the Non-Resident Landlord Scheme (NRLS) 20% withholding at basic rate, the new 22% basic rate means the NRLS withholding rate will also increase to 22% (HMRC has confirmed the NRLS rate will align with the new basic rental rate; confirm the current NRLS rate at gov.uk/guidance/rental-income-non-resident-landlords). The SDLT non-resident surcharge on purchase combined with the higher rental income tax rates from 2026 and the existing mortgage interest credit restriction significantly reduces the net investment return for non-resident UK landlords on new property purchases.

This article is for general information only and does not constitute tax, legal, financial or immigration advice. Rules and rates change; verify with the primary sources cited or consult a qualified adviser before acting.

FAQ

What is the SDLT non-resident surcharge and who pays it?

The 2% SDLT non-resident surcharge (Finance Act 2021, effective 1 April 2021) applies to all purchases of residential property in England and Northern Ireland by non-UK-resident buyers. Non-UK-residency is assessed under HMRC’s SDLT 183-day test: a buyer who has not been present in the UK for 183 days in any continuous 12-month period in the year before completion pays the surcharge. It applies in addition to the standard SDLT rate and any Additional Dwelling Surcharge. Scotland and Wales have separate but broadly equivalent property transaction tax supplements.

How is the SDLT non-resident surcharge calculated on a £400,000 property?

On a £400,000 residential property in England, for a non-UK-resident who already owns another property: standard SDLT = (0% x £125,000) + (2% x £125,000) + (5% x £150,000) = £2,500 + £7,500 = £10,000; 3% ADS (£400,000 x 3%) = £12,000; 2% NRS (£400,000 x 2%) = £8,000; total SDLT = £30,000 (7.5% of purchase price). For a first-time non-UK-resident buyer (no ADS, but also no first-time buyer relief): standard SDLT £10,000 + NRS £8,000 = £18,000 (4.5%).

Can I get a refund of the SDLT non-resident surcharge?

Yes. Buyers who pay the 2% NRS at completion can claim a refund if they subsequently meet the 183-day UK presence test in any continuous 12-month period within the 24-month window (starting 12 months before and ending 12 months after completion). The refund is claimed via HMRC’s online SDLT surcharge refund form. UK nationals on fixed-term overseas assignments who plan to return within 12 months of a UK property purchase should assess whether the refund window applies to their situation.

Does Scotland have an equivalent to the SDLT non-resident surcharge?

Yes. Revenue Scotland applies a 2% non-resident supplement to LBTT for buyers who are not Scottish residents (assessed on the same 183-day presence basis as England’s NRS). Scotland’s Additional Dwelling Supplement (ADS) is 6% (higher than England’s 3% ADS), making Scottish buy-to-let purchases by non-residents particularly expensive. On a £350,000 Scottish property for a non-resident who already owns another property: LBTT £17,850 + ADS £21,000 + non-resident supplement £7,000 = £45,850 (13.1%).

How do the new Autumn Budget 2025 rental income tax rates affect non-resident landlords?

From 6 April 2026, UK residential rental income is taxed at 22% basic rate (was 20%), 42% higher rate (was 40%), and 47% additional rate (was 45%) per the Autumn Budget 2025 OOTLAR. Non-Resident Landlord Scheme (NRLS) withholding will align to the new 22% basic rate. This increases the effective tax cost of UK buy-to-let investment for all UK landlords, resident and non-resident, and reduces net rental yields especially for higher-rate taxpayers subject to the existing mortgage interest credit restriction.

Does Wales have the SDLT non-resident surcharge?

No. Wales does not currently apply a specific non-resident buyer surcharge on Land Transaction Tax (LTT); non-resident buyers in Wales pay the standard LTT rates plus the 4% Additional Rate if they already own another property. This makes Welsh property purchases by non-UK-resident buyers less expensive than equivalent English property purchases in SDLT terms. LTT is administered by the Welsh Revenue Authority (gov.wales/land-transaction-tax); the standard residential rates are: 0% up to £225,000; 6% on £225,001-£400,000; 7.5% on £400,001-£750,000.

Sources

1. HMRC -- SDLT non-resident surcharge guidance (183-day test and calculation) (verified 26 April 2026)
2. HMRC -- SDLT Manual (verified 26 April 2026)
3. GOV.UK -- Autumn Budget 2025 OOTLAR (rental income tax rates from 6 April 2026) (verified 26 April 2026)
4. Revenue Scotland -- LBTT rates and non-resident supplement (verified 26 April 2026)
5. Welsh Revenue Authority -- Land Transaction Tax guide (verified 26 April 2026)