Mandate: SDLT & Tax Structuring
UK Stamp Duty for Non-Residents.
Three charges stack simultaneously.
As of 2026/27, a non-UK resident purchasing residential property in England pays three layers of SDLT simultaneously. Know your exposure before exchange — the differential between a UK-resident and non-resident buyer on a £750,000 acquisition is £15,000.
The Current Structure
What overseas buyers pay in 2026/27
The SDLT position for non-resident buyers has changed materially since 2021. Three separate charges now apply simultaneously — understanding each one is the starting point for any acquisition decision.
Three layers stack simultaneously
A non-UK resident buying a second home in England pays: standard SDLT bands, the 3% additional-rate surcharge, and the 2% non-resident surcharge (introduced April 2021). All three apply to the full purchase price.
£62,500 on a £750,000 purchase
An overseas investor acquiring a £750,000 London flat as a second home pays approximately £62,500 in SDLT — an effective rate of 8.3%. A UK-resident buyer pays £47,500. The £15,000 differential is the non-resident surcharge.
The surcharge is recoverable
The 2% non-resident surcharge is refundable if the buyer establishes 183 days of UK physical presence within 12 months of completion. The residency test is based on physical presence, not citizenship — British passport holders living abroad are not exempt.
Structuring can reduce exposure
Timing the purchase relative to UK residency plans, reviewing whether a UK-resident entity structure is appropriate, and understanding the interaction with ATED for higher-value acquisitions held through companies are all worth considering before exchange.
Rate Reference
SDLT bands: standard, additional rate, and non-resident surcharge
| Purchase Price Band | Standard Rate | Additional Rate (2nd home / BTL) | Non-Resident Surcharge |
|---|---|---|---|
| Up to £250,000 | 0% | 3% | +2% |
| £250,001 – £925,000 | 5% | 8% | +2% |
| £925,001 – £1,500,000 | 10% | 13% | +2% |
| Over £1,500,000 | 12% | 15% | +2% |
Rates as at 2026/27. The non-resident surcharge applies to all bands. This table is for reference only and does not constitute tax advice. Obtain independent tax counsel before any acquisition.
Advisory Note
Structuring considerations before exchange
The residency test for SDLT is independent of the income tax Statutory Residence Test. British passport holders living abroad are not exempt — the test is based on physical presence in the UK during the 12 months before and 12 months after completion. A buyer who spends 183 days or more in the UK in the year following completion may reclaim the 2% non-resident surcharge.
For buyers who do not plan to establish UK residency, there are structural approaches worth considering before exchange. Timing the purchase relative to any future UK residency plans is the most straightforward. For higher-value acquisitions, the interaction with the Annual Tax on Enveloped Dwellings (ATED) for properties held through companies is a separate planning consideration — ATED applies to residential properties worth over £500,000 held in a corporate structure.
The practical implication is that the total acquisition cost for a non-resident buyer is materially higher than the headline purchase price. On a £1,000,000 acquisition, the SDLT liability for a non-resident buying a second home is approximately £91,250 — compared with £41,250 for a UK-resident first-time buyer. This differential should be factored into any yield or return calculation from the outset.
CM² does not provide tax advice. We work with a panel of independent tax advisers who specialise in non-resident property acquisition and can provide a worked SDLT calculation for your specific budget, ownership structure, and residency position before you commit to any acquisition.
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Tell us your target budget, ownership structure, and residency position. CM² will provide a worked SDLT calculation and, where relevant, introduce you to a specialist tax adviser.