Stamp Duty on Second Homes | How to Reduce or Avoid It

Buying a second home, holiday property, or Buy to Let is exciting — until you hit the reality of Stamp Duty. That extra 5% surcharge on top of standard rates can add thousands to your costs.

There’s no silver bullet to avoid it. But with the right legal structure, ownership setup, and lending approach, there are legitimate, fully compliant ways to reduce what you pay — and in some cases, avoid the surcharge entirely.

At Strive, we specialise in second home and complex mortgage setups. Here’s how Stamp Duty works on second homes, and the strategies worth exploring.

How Much Is Stamp Duty on a Second Home

If your purchase triggers the higher rate, you’ll pay a 5% surcharge on top of the normal Stamp Duty Land Tax (SDLT) bands.

That means you’ll pay:

• 5% on the portion up to £250,000
• 10% on the portion between £250,001 and £925,000
• 15% on the portion above £925,000

To see exactly what that looks like for your property price, try Strive’s Stamp Duty Calculator.

For official rates and thresholds, visit GOV.UK – Stamp Duty Land Tax Rates.

When Does the Higher Rate Apply

You’ll usually pay the higher rate if you’re buying an additional property while already owning (or having an equitable interest in) another property worth over £40,000 — anywhere in the world.

Key rules to keep in mind:

• It’s ownership, not the mortgage, that matters. If your name’s on the deeds, you’re counted.
• Married couples and civil partners are treated as one. If either of you owns another home, both trigger the higher rate.
• The rule applies to global property, not just homes in the UK.

There’s No Silver Bullet — But There Are Smart Ways to Reduce It

Let’s be clear: there’s no universal loophole to dodge the 5% surcharge.
However, with the right legal setup, lender choice, and ownership structure, you may be able to reduce or avoid it legally.

These strategies aren’t tricks — they’re about structuring your purchase correctly so it genuinely falls outside higher-rate rules.

Below are some of the legitimate ways buyers approach it.

Using a JBSP Mortgage to Reduce or Avoid Higher Stamp Duty

A Joint Borrower Sole Proprietor (JBSP) mortgage can sometimes help you avoid paying the higher rate when it’s set up correctly.

A JBSP allows someone, often a parent, partner, or relative, to go on the mortgage without being on the property deeds.

Because Stamp Duty applies to the legal owner on the title deeds — not the mortgage itself — the surcharge may not apply if the borrower who’s on the deeds doesn’t already own another property.

When it can help:

• A parent helps a child buy but already owns their own home.
• A partner contributes to affordability but doesn’t want ownership.
• A family member supports borrowing but doesn’t need equity.

It’s not a loophole; it’s a recognised structure that lenders and HMRC both accept.

That said, JBSPs require trust and clear agreements, as the non-owning borrower remains liable for the mortgage but has no legal ownership or profit share.

A handful of lenders even allow JBSP Buy to Let mortgages, though they’re less common.

Reclaiming the 5% Surcharge If You Sell Your Old Home

If you buy your new property before selling your old one, you’ll have to pay the 5% surcharge upfront.

However, if you sell your previous main residence within three years, you can apply to reclaim the additional 5% from HMRC.

To qualify, both of these must apply:

• The property you sold was your main home.
• The new property replaces it as your main residence.

It doesn’t apply if you sell the second home instead, or if your previous property wasn’t your main residence.

Alternative Strategy: Remortgage and Buy in Someone Else’s Name

Another possible setup is to remortgage your existing home to release equity, then gift that money to someone who doesn’t own property.

That person could then buy the second property in their own name — meaning the 5% surcharge might not apply.

Of course, this requires absolute trust and professional legal advice, as you’d have no legal ownership or protection unless formal agreements are in place.

Still, in certain family or investment situations, it can be an effective, legitimate route.

Can You Add Stamp Duty to Your Mortgage

Yes — in many cases, lenders allow you to increase your borrowing slightly to cover Stamp Duty costs, as long as your loan-to-value (LTV) remains within limits.

Example:

If you’re buying for £400,000 with a £150,000 deposit, you could instead put down £120,000 and borrow £30,000 extra to cover Stamp Duty (subject to affordability and LTV checks).

It’s not always the cheapest long-term solution, but it can help buyers manage upfront cash flow.

When Do You Need to Pay Stamp Duty

Stamp Duty must be paid within 14 days of completion.

Your solicitor or conveyancer usually handles this on your behalf, filing the return and making the payment directly to HMRC.

You can check the full process and current thresholds via GOV.UK – Stamp Duty Land Tax Overview.

How Strive Can Help

Let’s be honest — Stamp Duty feels like a tax you get nothing back for. It’s frustrating, it’s complicated, and it’s easy to overpay.

That’s where we come in.

At Strive, we help clients:

• Understand how the surcharge applies to their purchase.
• Explore legitimate structures like JBSP mortgages.
• Plan ahead to reclaim or reduce Stamp Duty where possible.
• Secure lenders that support complex ownership setups.

There’s no silver bullet, but with the right setup, you can stay compliant, stay smart, and potentially save thousands.

Learn more about second home mortgages or contact us today to explore your options with a Strive expert.