Buyers of residential property in England and Northern Ireland who are not UK resident pay Stamp Duty Land Tax at 2 percentage points above every rate that would otherwise apply, including the higher rates for additional dwellings and first time buyer rates. For an individual, the test is simple and mechanical: were you present in the UK at the end of at least 183 days in the 12 months before completion? Nationality, visas and the statutory residence test used for income tax are irrelevant.

Where does the surcharge come from and what does it cover?

The surcharge was introduced by section 75ZA of and Schedule 9A to the Finance Act 2003 and applies to purchases with an effective date on or after 1 April 2021. Under paragraph 2 of Schedule 9A it applies to the purchase of a major interest, freehold or leasehold, in one or more dwellings where:

  • one or more of the buyers is non resident in relation to the transaction;
  • the interest is not a lease with seven years or less to run at the start of the effective date; and
  • the consideration is £40,000 or more or, for a lease, the premium is £40,000 or more or the annual rent is £1,000 or more.

The surcharge applies even if the buyer will live in the property and owns nothing else. It also adds 2% to the tax on rent when a new residential lease is granted. It does not apply to non residential property or to mixed purchases such as a shop with a flat above it (see SDLT on mixed use property), and it does not apply to purchases in Scotland or Wales.

How is an individual’s residence tested?

Paragraph 4 of Schedule 9A treats an individual as UK resident in relation to the purchase if they are present in the UK on at least 183 days during any continuous 365 day period within a “relevant period”. That period starts 364 days before the effective date and ends 365 days after it. Three points follow from HMRC’s guidance:

  • A day counts if the person is in the UK at the end of that day.
  • Days anywhere in the UK count, including Scotland and Wales, not just England and Northern Ireland.
  • This is not the statutory residence test. Someone who is UK resident for income tax under the SRT can still be non resident for SDLT, and the reverse. Citizenship, right of abode and visa status play no part.

The effective date is normally completion, but if the contract is substantially performed earlier, for example by taking possession, that earlier date is used.

Because the return is due within 14 days of completion, buyers cannot wait to see whether they will spend enough time in the UK afterwards. Paragraph 18 requires the return to assume that anyone who has not yet met the 183 day test stays outside the UK for the rest of the relevant period. The surcharge is paid, and reclaimed later if the test is met.

How are joint buyers and couples treated?

If any one buyer is non resident, the surcharge applies to the whole purchase, however small that buyer’s share. There is one relief for couples. Under paragraph 12, where spouses or civil partners buy together, are living together and neither is acting as a trustee, and one of them is UK resident in relation to the purchase, the other is treated as UK resident too. HMRC’s example is a married couple living in the USA where one spent 183 days in the UK and the other 100 days: neither pays the surcharge.

The relief does not extend to unmarried partners or other co buyers. A UK resident buying with a sibling or friend who lives abroad pays the 2% on the whole price.

How are companies, partnerships and trusts treated?

Companies

A company is non resident if it is not UK resident for corporation tax on the effective date. A UK resident company is also treated as non resident if it is a close company, it meets the non UK control test and it is not an excluded company. This catches a UK company set up by overseas owners to buy a home. Where it applies, the test for the individuals involved looks only at the 12 months before purchase, so no later refund is possible (SDLTM09890).

Partnerships

Partners buying for a partnership are treated as joint buyers, and the same backward looking test applies. In HMRC’s example, an LLP with one partner who spent 200 days in the UK and another who spent 150 pays the surcharge, even though the second partner spends 200 days in the UK the following year.

Trusts

For most trusts, the surcharge applies if any trustee is non resident. For a bare trust, or a trust under which a beneficiary is entitled to occupy the dwelling for life or to its income, the beneficiary’s residence is tested instead.

What does the surcharge cost in practice?

Illustration only. Elena lives in Spain and owns her home there. She buys a flat in London for £400,000 and was in the UK on 60 days in the year before completion. Her home in Spain makes the purchase a higher rates transaction, because property anywhere in the world counts. The 2% then goes on top.

Portion of the price Rate Tax
First £125,000 7% £8,750
£125,001 to £250,000 9% £11,250
£250,001 to £400,000 12% £18,000
Total £38,000

A UK resident buying the same flat as their only home would pay £10,000. The surcharge alone is £8,000 of the difference.

Can the surcharge be refunded?

Yes, for individuals. If, after the purchase, every buyer achieves 183 days of presence in a continuous 365 day period within the relevant period, the transaction was never a non resident transaction. Each buyer’s 365 day window can be different. The return is amended to remove the surcharge, and the amendment must be made within two years of the effective date. Refunds are only possible where all the buyers are individuals, so purchases through companies, partnerships and discretionary trusts cannot be refunded.

HMRC’s online repayment service asks for the unique transaction reference number, the effective date, the tax paid, the price or lease premium and any net present value calculation, and a UK bank account. Agents need a signed letter of authority. If the higher rates refund for replacing a main residence has already been claimed, the form asks for the tax due after that refund.

Illustration only. Elena completed on 15 January 2026, then moved to London for work and was in the UK on 190 days in the 12 months after completion. She can claim back the £8,000 surcharge, provided she amends the return within two years of completion.

What evidence of UK days does HMRC accept?

HMRC’s guidance lists the kinds of records it may ask for: credit card and bank statements showing day to day spending, work diaries, timesheets or rosters, mobile phone records, utility bills and records of club membership and use. It says it will weigh the quality of all the evidence and take a pragmatic approach, but buyers who plan to rely on days spent in the UK should keep a log from the start.

Are there any reliefs?

Crown employees, such as diplomats, civil servants and members of the armed forces serving abroad, are treated as present in the UK on days spent overseas for that employment, and so is a spouse or civil partner who is not separated from them. The relief must be claimed in the return or an amendment. Certain property funds, including PAIFs and UK REITs, are also outside the surcharge.

What mistakes come up most?

  • Relying on SRT residence for income tax instead of the 183 day count.
  • Forgetting that one non resident co buyer brings the whole price into charge.
  • Buying through a UK company owned from abroad and assuming its UK residence is enough.
  • Missing the two year window for the refund. Capital gains on a later sale are a separate matter, covered in non resident CGT on UK property.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.