Press Room

26 Aug 2020

2% Stamp Duty Land Tax surcharge for non-residents


From 1 April 2021, the government intends to impose a 2% surcharge on non-resident individuals purchasing residential property in England and Northern Ireland. In this article, we will explore when the 2% surcharge applies, who it applies to and what property is caught under the rules. 

Currently, both UK resident and non-resident individuals may be subject to SDLT at a maximum rate of 12% (increased to 15% for multi home-owners and companies). The new rules will mean that non-resident individuals will be subject to SDLT up to 14% after the 2% surcharge, and 17% where it is the purchase of a second, or additional, UK home. These rates will apply to the purchase of freehold and leasehold property, as well as an increase to the SDLT payable on rents upon the grant of a new lease.

Who is considered a non-resident individual?

Individuals familiar with the UK tax system will know that UK tax residence can generally be a complex topic. However, for SDLT purposes, an individual will be considered non-resident where they have spent less than 183 days in the UK during the year ending with the date of purchase, and less than 183 days in the UK in the year immediately following the date of purchase. 

The draft legislation does not consider any exceptional circumstances, however an exemption applies for individuals who are non-resident as a result of working as an employee overseas for the Crown. In this case, each day of overseas employment will be counted as a day of UK residence.

Special rules apply where the property is purchased jointly, and one of the joint purchasers is the individual’s spouse or civil partner, in this case, where one spouse or civil partner is UK resident, then the transaction will be treated as a UK resident transaction and not liable to the 2% surcharge.

Where individuals pay the surcharge but then satisfy the residence conditions in the 12 months following the transaction, they may be entitled to a refund.

Other purchasers

The 2% surcharge not only applies to non-resident individuals, it also applies to non-resident companies, trustees of unit trust schemes, partnerships and trusts where the beneficiary is not entitled to occupy the dwelling(s) for life or income earned from the dwelling(s) under the terms of the settlement. These rules are complex and various exemptions can apply, for further information see the resident conditions set out in Part 4 onwards of Schedule 9A: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/902094/New_rates_of_Stamp_Duty_Land_Tax_for_non-UK_residents_from_1_April_2021_-_Draft_legislation.pdf

What is considered to be residential property?

For purposes of the 2% surcharge, a residential property is considered one that is or is suitable to be used as a dwelling, including circumstances where the property is in the process of being constructed or adapted for use as a dwelling. Any land, buildings and other structures enjoyed along with the dwelling will also form part of the definition.

The 2% surcharge does not apply for the following:

  • A lease with less than 21 years remaining to run
  • A lease which is subject to a sub-lease which has less than 21 years remaining to run
  • Any property where the purchase price is less than £40,000

Any buildings listed under s.116(2) and (3) of FA 2003 will also not be treated as a dwelling for the purpose of the surcharge (this includes buildings such as hospitals, hotels, prisons and boarding schools).


Elizabeth Corkery

Elizabeth Corkery

Lizzie is a Senior Associate in the Private Client team at Andersen Tax in London, focusing on UK and U.S. personal taxation. She has worked with high net worth individuals, senior executives, international assignees and entrepreneurs, providing a range of tax consulting and compliance services.

Email: Elizabeth Corkery