Answers · UK 2025/26
What taxes do I pay on a second property in the UK?
On purchase: SDLT + 5% Additional Property Surcharge (Scotland 8% ADS, Wales 4%). While owning: rental income tax + Council Tax (some councils charge 100-200% second-home premium). On sale: CGT 18%/24% above £3,000 AEA. Full value subject to IHT.
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UK second property tax obligations 2025/26 across the life cycle. ON PURCHASE. England/NI: SDLT standard + 5% surcharge (raised from 3% on 31 October 2024). £250k 2nd home = £15,000 SDLT. Scotland: LBTT + 8% ADS (raised from 6% on 5 December 2024). Wales: LTT + 4% higher rates. OWNERSHIP: full Council Tax (some councils 100-200% premium on long-term empty/second homes). Rental income taxed at marginal rate; Section 24 mortgage interest limited to 20% credit. SALE: CGT 18% basic / 24% higher above £3,000 AEA. Report within 60 days via Property Reporting Service. No Private Residence Relief on second home. DEATH: full value in estate for IHT 40%. Only main home gets RNRB. Strategic options: limited company (CT 19-25% + ATED over £500k); gift to children 7+ years before death.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.