Comparison · Property & Mortgages · 2026/27
Let to Buy vs Buy to Let UK 2026/27
Let to buy means renting out your current home to fund moving elsewhere. Buy to let means purchasing an additional property purely as an investment. This 2026/27 guide compares the SDLT surcharge, mortgage process and tax treatment.
Key facts -- 2026/27
- • SDLT additional property surcharge: 5% on top of standard rates
- • SDLT surcharge refund window: if original home sold within 3 years
- • Section 24 mortgage interest relief: 20% basic-rate credit only
- • Rental income: taxable via Self Assessment in both scenarios
- • Private Residence Relief: can apply to the main-residence period only
- • Landlord compliance: insurance, EPC, gas safety, deposit protection apply to both
How Each Works
Let to buy starts from wanting to move house without selling your current one -- you remortgage the existing property onto a buy-to-let basis, releasing equity to fund the deposit on a new residential purchase, then let out the original home.
Buy to let is a straightforward investment purchase -- you buy an additional property specifically to rent out, with no change to where you currently live or your existing mortgage.
Worked Example: SDLT on a GBP 300,000 New Purchase
| Scenario | SDLT surcharge applies? | Refundable? |
|---|---|---|
| Let to buy (keeping old home, buying new main residence) | Yes, 5% extra | Yes, if old home sold within 3 years |
| Buy to let (additional investment property) | Yes, 5% extra | No |
Illustrative only -- confirm your specific circumstances with a conveyancer. Use the stamp duty calculator to estimate your SDLT bill.
Side-by-Side Comparison
| Factor | Let to buy | Buy to let |
|---|---|---|
| Existing home | Retained, remortgaged | Unaffected |
| Applications required | Two, simultaneous | One |
| SDLT surcharge refund possible | Yes | No |
| CGT relief on eventual sale | Partial PRR possible | No PRR |
| Best for | Keeping a valued home while moving | Pure investment purchase |
Frequently Asked Questions
Frequently Asked Questions
What is the difference between let to buy and buy to let?
Let to buy means renting out your current home to fund buying a new one to live in. Buy to let means purchasing an additional property purely as an investment while keeping your current home.
Does the SDLT surcharge apply to both?
Generally yes, 5% on the new purchase in both scenarios -- let to buy purchasers may reclaim it if they sell the original home within 3 years.
Can I get a let to buy mortgage with an existing residential mortgage?
You typically need to remortgage the existing home to a buy-to-let basis first, assessed on rental income affordability.
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How does Section 24 affect both scenarios?
Equally -- mortgage interest relief is restricted to a 20% tax credit for both let-to-buy and standard buy-to-let properties, since both are rental income.
Why choose let to buy over selling?
To retain an asset with strong rental demand, sentimental value, or growth potential while accessing funds for a new purchase via remortgaging.
Are let to buy mortgages harder to get?
Not inherently, but they involve two simultaneous applications (remortgage plus new residential mortgage) assessed together.
What about CGT when selling a let to buy property later?
Apportioned between main-residence period (Private Residence Relief may apply) and let-out period (generally taxable) -- can reduce the bill versus a pure buy-to-let.
Is rental income taxable in both?
Yes -- reported via Self Assessment, with allowable expenses deducted (mortgage interest gets the 20% credit rather than full deduction).
Which has lower upfront costs?
Depends on circumstances -- let to buy avoids selling costs but adds remortgage fees; a standalone buy to let avoids the remortgage step.
Do both require landlord insurance and compliance?
Yes -- specialist landlord insurance, gas safety, EPC, deposit protection and any licensing apply equally once a property is let out.
Related calculators
Calculate your Rental Yield
Calculate gross and net rental yield for buy-to-let properties.
Calculate your Mortgage
Calculate monthly mortgage payments, total interest, and full repayment cost.
Calculate your Stamp Duty
Calculate Stamp Duty Land Tax (SDLT) for your property purchase in England.
Capital Gains Tax Calculator
Calculate Capital Gains Tax on property, shares and other assets for 2025/26.
Disclaimer: This comparison is general educational information based on 2026/27 UK property tax rules. It is not financial or tax advice. Consult a mortgage broker and tax adviser and refer to gov.uk for current SDLT rules.