Do I owe the SDLT surcharge?
The 5% additional-dwelling surcharge applies to around a third of all UK residential purchases — but the rules around replacement of main home, bare trusts for adult children, and the 36-month reclaim window mean the answer often isn't what you'd expect. This tool walks you through the specific questions that determine the verdict.
Who is buying the property?
Company purchases are treated differently from individual ones.
Notes on the surcharge rules
The surcharge is 5% of the full purchase price, not a banded rate. It applies on top of standard residential SDLT. On a £500,000 purchase it adds £25,000; on £1,000,000 it adds £50,000. The rate increased from 3% to 5% on 31 October 2024.
Replacing your main home is the most common exception. If you're selling your old main home and buying a new one, no surcharge applies — provided the old home is either already sold or sells within 36 months of the new purchase. If you pay the surcharge at completion and the old home sells in time, you reclaim it from HMRC. If the old home doesn't sell within 36 months, the surcharge becomes permanent.
Company purchases always pay the surcharge, regardless of whether the company owns any other property. First-time buyer relief is never available to companies.
The bare trust structure for adult children is a specialist area. Parents buying a property for an adult child (18+) to live in can use a bare trust — with the child as sole beneficial owner — to shift the SDLT treatment onto the child. If the child owns no other property, no surcharge applies. The structure must be in place before exchange, not after. Retrospective declarations of trust do not reclaim surcharge already paid.
Minor children trigger the surcharge on the parents' property count. Under Schedule 4ZA FA 2003 paragraph 12, a minor child's property holdings are imputed to the parents for surcharge purposes, and vice versa. The bare trust structure does not work for under-18s.
Complex situation?
Some paths need a specialist before exchange.
Bare trust structuring, mortgage assumption in family transfers, company vs individual trade-offs, and marginal 36-month reclaim situations all warrant specialist input before completion. The diagnostic quiz matches you with an SDLT specialist in 48 hours, free of charge.
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