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  • Legal FAQs

    3 percent surcharge

    Hello everyone,

    I am planning to buy a place of my own to live in and also plan to invest, but I don’t wanna buy the residential one in any rush. So there is a possibility, by the time I find the residential one, I may already have bought an investment property.

    So my question is, in the scenario of me finding a residential property after I have bought an investment property, would I have to pay 3 percent surcharge? Is there a possibility to declare that the new one is my residential property and then pay the surcharge retrospectively on existing investment one.

    Any comments would be appreciated.

    Thank you

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    Simple answer from my understanding no. As your residential is likely to cost more buy it first

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    As things stand - you would be liable for the 3% SD surcharge on the second purchase.

    Best to buy PPR first and get lodger in - first £7500 pa of rent being tax free via Rent a Room scheme.

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    The short answer is that you will be liable to the surcharge on any additional residential property purchases.

    A bit more detail here:

    https://www.gov.uk/guidance/stamp-duty-l...l-property

    The real nitty gritty here:

    https://www.gov.uk/hmrc-internal-manuals...sdltm09730

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    A good teacher must know the rules; a good pupil, the exceptions.

    Martin H. Fischer


    if you buy the first one in a company you would be ok

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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA