Does the 3% stamp duty land charge surcharge always apply when buying a second home?

Graham Buckell comments:

“As most people are aware there is now a 3% stamp duty land tax (“SDLT”) surcharge if buying a second home.

This cannot always be avoided particularly where the property is for your own use. However, it is increasingly common that parents buy properties for children or other relatives’ use. Using the child as an example, if the parents buy it the 3% surcharge will apply but consider the following options:

  • Lend the child the cash for him (or her) to buy the property. If desired the loan could be secured via a registered charge over the property.
  • Establish a trust where the child has a life interest. If a trust buys a property for the use as the residence of a beneficiary with a life interest then no surcharge will apply.

In both cases, unlike where the parents buy, capital gains tax principal private residence relief is available on a later sale.

However, these two options have very different inheritance tax implications. The right choice will depend on family circumstances and wishes.”

If you are considering the purchase of a second home for use by your children or other relatives and would like to speak with Graham, please do contact him at

As always, the nature of this advice is generic. You should take no action as a result of it, without consulting your professional advisor.