Stamp Duty for Overseas Buyers in 2026: The Bands, the 5% Surcharge and the 2% Non-Resident Charge
A buyer who lives outside the UK and already owns a home somewhere else in the world will usually pay Stamp Duty Land Tax on a London flat at three layers of rates: the standard bands, a 5% surcharge for owning more than one home, and a 2% charge for being non-resident. Stacked together, the slice of the price up to £125,000 is taxed at 7% and the slice above £1.5 million at 19%. On a £1 million flat that comes to £113,750, against £43,750 for a UK resident buying a first and only home.
The tax is paid by the buyer, through the solicitor, when the purchase completes. It applies in England and Northern Ireland only; Scotland and Wales have their own taxes. Two details matter more than the headline rates. The 2% can be reclaimed if you spend enough time in the UK around the purchase, and for an off-plan flat the rates that apply are the ones in force at completion, not at reservation.
Everything below is as of October 2026, before the Autumn Budget on 28 October 2026. If the Budget changes Stamp Duty, these figures change with it, and we will say so here.
The bands in force since 1 April 2025
Stamp Duty is a slice tax. Each rate applies only to the part of the price that falls inside its band, much like income tax. The standard bands below have been in force since 1 April 2025, when the temporary higher thresholds of 2022 to 2025 ended.
| Slice of the price | Standard rate | Owns another home (+5%) | Non-resident, no other home (+2%) | Non-resident and owns another home (+7%) |
|---|---|---|---|---|
| Up to £125,000 | 0% | 5% | 2% | 7% |
| £125,001 to £250,000 | 2% | 7% | 4% | 9% |
| £250,001 to £925,000 | 5% | 10% | 7% | 12% |
| £925,001 to £1.5 million | 10% | 15% | 12% | 17% |
| Above £1.5 million | 12% | 17% | 14% | 19% |
The right-hand column is where most overseas buyers end up. The next two sections explain why.
The 5% higher rates: why most overseas buyers pay them
The higher rates for additional dwellings add 5 percentage points to every band if, after the purchase, you will own more than one residential property. The test is worldwide. HMRC counts a major interest in a dwelling anywhere in the world worth £40,000 or more, so a flat in Dubai or a family house elsewhere abroad can trigger it. The surcharge rose from 3% to 5% for purchases with an effective date on or after 31 October 2024.
There is one main way out. If the London flat replaces your main residence and the old one is sold within 36 months, the higher rates do not apply. For a buyer who will keep a home abroad and use London as a second base or an investment, that exemption does not help. In practice, most overseas buyers pay the 5%.
The 2% non-resident charge and the 183-day test
Since 1 April 2021, buyers who are not UK resident pay a further 2% on top of all other residential rates, including the 5% higher rates, on purchases in England and Northern Ireland.
The residence test for this charge is its own test, separate from the statutory residence test used for income tax. An individual is non-UK resident for Stamp Duty if they were not present in the UK for at least 183 days during the 12 months before the purchase. Joint purchases follow two rules that pull in opposite directions:
- if any one of several joint buyers is non-resident, all of them are treated as non-resident;
- but if one spouse or civil partner is UK resident, both are treated as UK resident, unless they are separated or buying as trustees.
A married couple or civil partners where one partner is already UK resident can therefore avoid the 2% on a joint purchase, while two friends or relatives buying together, one of whom lives abroad, cannot.
Getting the 2% back
The non-resident charge is the one part of the bill you can reverse. An individual who spends at least 183 days in the UK in any continuous 365-day period that runs from 364 days before to 365 days after the effective date, usually completion, can reclaim the 2% by amending the Stamp Duty return. The claim must be made within two years of the effective date, and it is not available if any buyer is a company.
This matters for buyers who plan to move to London, for example for work or study, around the time of completion. It does not touch the 5% higher rates, which depend on what you own, not on where you live. Spending that much time in the UK can also make you UK resident for income tax and capital gains purposes, so take tax advice before you plan a stay around the refund. We cover the wider picture in our guide to taxes for overseas owners.
What it adds up to: three worked examples
The table applies the bands to three purchase prices. These are illustrations of the arithmetic, not prices of any particular flat and not a quote. Your solicitor calculates the actual figure.
| Price | UK resident, only home | Non-resident, no other home | UK resident, owns another home | Non-resident and owns another home |
|---|---|---|---|---|
| £600,000 | £20,000 | £32,000 | £50,000 | £62,000 |
| £1,000,000 | £43,750 | £63,750 | £93,750 | £113,750 |
| £2,000,000 | £153,750 | £193,750 | £253,750 | £293,750 |
Take the £600,000 case in the right-hand column. The first £125,000 is taxed at 7% (£8,750), the next £125,000 at 9% (£11,250) and the remaining £350,000 at 12% (£42,000), a total of £62,000, or a little over 10% of the price. On the £2 million flat the same buyer pays close to 15% of the price. The first column assumes a buyer who is not claiming first-time buyer relief, which we deal with below.
An online Stamp Duty calculator runs the same sums and is useful as a cross-check, but the figure in your solicitor’s completion statement is the one you pay.
Buying through a company
Some buyers consider holding the flat through a company. For a single residential flat it rarely helps on Stamp Duty. When a company or other non-natural person buys a dwelling for more than £500,000, a flat rate of 17% applies to the whole price for transactions from 31 October 2024, up from 15%, and the 2% non-resident charge is added on top. On a £1 million flat that is £190,000.
There are reliefs from the 17% rate, for example for property rental businesses and property developers. Where a relief is claimed, the company still pays the 5% higher rates, and the 2% where it applies. A company that owns a dwelling worth more than £500,000 also pays the Annual Tax on Enveloped Dwellings, £4,600 a year for a home worth £500,000 to £1 million in 2026 to 2027, unless a relief is claimed on a return. And a company structure does not take a London home out of UK inheritance tax: since 6 April 2017, interests in companies that hold UK residential property have been within its scope. Any overseas company must also be on the Register of Overseas Entities before it can be registered as owner.
First-time buyer relief, off-plan timing and the Budget
First-time buyer relief: do not count on it
Since 1 April 2025, first-time buyers pay 0% up to £300,000 and 5% on the slice from £300,001 to £500,000, with no relief at all if the price is over £500,000. A first-time buyer must never have acquired a major interest in a dwelling anywhere in the world. Whether a non-resident can claim it, with the 2% added on top, is not clear-cut, so ask your solicitor before relying on it. With the £500,000 cap, most London new-build flats are above the limit anyway. We would not plan a budget around this relief.
Off-plan: the rates at completion apply
For a new build, the effective date for Stamp Duty is normally completion. The rates in force on that day apply, not those in force when you reserved or exchanged. When the higher rates went from 3% to 5% in October 2024, transitional protection covered only contracts exchanged before 31 October 2024. If you exchange today on a flat due in 2028, you pay whatever the rates are in 2028.
The Budget on 28 October 2026
The figures in this article are those in force as of October 2026, before the Autumn Budget on 28 October 2026. As of 19 October 2026 no immediate Stamp Duty changes were expected, although the government had not said so itself. Anything announced on Budget day would still need legislation and a start date before it applies. Re-check the rates after the Budget and again before completion.
Before you budget: what to check
- Will you own any other residential property worth £40,000 or more, anywhere in the world, once the purchase completes? If so, assume the 5% applies.
- Have you spent 183 days or more in the UK in the 12 months before completion, and is your spouse or civil partner UK resident?
- Could you spend 183 days in the UK within the refund window, and have you taken tax advice on what that does to your wider tax position?
- Are you buying in your own name or through a company, and has an adviser compared the two, including ATED and inheritance tax?
- For an off-plan flat, have you budgeted for the possibility that rates change before completion?
- Has your solicitor confirmed the figure in writing, and diarised the two-year deadline if you may claim the 2% back?
Stamp Duty is only one of the costs of buying. Our step-by-step guide to buying a London new-build from abroad sets it alongside the deposits and legal fees, and our guide to running costs covers what follows once you own the flat. Current London homes are on our properties page.
