The United Kingdom guide03 of 08
UK property taxes for overseas buyers.
Stamp duty with both surcharges worked out at four price points, every purchase and running cost, and how rent, gains and estates are taxed.
Most UK property investment sites quote a price and a yield and leave the tax to later. For an overseas buyer the tax is where the numbers change most. A non-resident buying an additional £250,000 apartment pays £20,000 in stamp duty; a UK resident buying the same apartment as their only home pays £2,500. This guide sets out every tax and cost, with the figures worked through.
How much stamp duty do overseas buyers pay?
Stamp duty land tax (SDLT) in England is charged in bands on the purchase price (GOV.UK):
Portion of the price | Standard rate |
|---|---|
Up to £125,000 | 0% |
£125,001 to £250,000 | 2% |
£250,001 to £925,000 | 5% |
£925,001 to £1.5 million | 10% |
Above £1.5 million | 12% |
Two surcharges sit on top, each charged on the whole price, not only the top slice. The higher rates for additional dwellings add 5%. The non-resident surcharge adds 2%. A non-resident buying an additional property pays both: 7% above the standard rates.
Here is what that means at four common price points:
Price | UK resident, only home | UK resident, additional (+5%) | Non-resident, only home (+2%) | Non-resident, additional (+7%) |
|---|---|---|---|---|
£200,000 | £1,500 | £11,500 | £5,500 | £15,500 |
£250,000 | £2,500 | £15,000 | £7,500 | £20,000 |
£300,000 | £5,000 | £20,000 | £11,000 | £26,000 |
£500,000 | £15,000 | £40,000 | £25,000 | £50,000 |
Most overseas investors fall in the last column. First-time buyer relief has separate rules and is not shown. Work out your stamp duty at any price.
Who counts as non-resident for stamp duty?
For SDLT, you are non-resident if you spent fewer than 183 days in the UK in the 12 months before the purchase (GOV.UK). This test is separate from your residence for income tax, and it is based on days present, not nationality or passport. A British expat living in Singapore is normally non-resident for SDLT; a foreign national working in London normally is not.
The refund. If you then spend 183 days in the UK in a qualifying 365-day period around the purchase, you can reclaim the 2% surcharge from HMRC. Your solicitor or adviser confirms the window and the claim deadline. Keep travel records.
Joint purchases. If any buyer is non-resident, the surcharge normally applies to the whole purchase. Special rules can treat a married couple or civil partners as UK resident if one of them is.
Currency · United Kingdom
- Euro€296,743
1 GBP = 1.19 EUR
- US dollarUS$332,849
1 GBP = 1.33 USD
- UAE dirhamAED 1,222,395
1 GBP = 4.89 AED
- Saudi riyalSAR 1,248,191
1 GBP = 4.99 SAR
- Omani rialOMR 127,980
1 GBP = 0.5119 OMR
- Thai bahtTHB 11,176,264
1 GBP = 44.71 THB
- Malaysian ringgitMYR 1,359,307
1 GBP = 5.44 MYR
Mid-market rates from ExchangeRate-API, updated daily; last update 20 October 2026. Banks and transfer services add a margin, and staged off-plan payments are made at the rate on each date.
When do the 5% higher rates apply?
- You already own residential property anywhere in the world and are not replacing your main residence.
- The buyer is a company, in all cases.
- On a joint purchase, any buyer already owns a home.
Questions on this guide? Ask our United Kingdom team.
Ownership, costs and what is for sale, on WhatsApp or by phone.
What other costs do you pay when you buy?
Cost | Typical amount | Notes |
|---|---|---|
Legal fees | £1,500–£3,000 typical | Fees vary; usually includes searches and Land Registry registration, plus VAT |
Reservation fee | Credited at completion | Not an extra cost unless you withdraw |
Mortgage costs | Lender and broker fees | Only if you borrow; see mortgages |
Snagging inspection | Modest fixed fee | Optional but sensible on a new-build |
Furniture pack | Varies by specification | Most city-centre apartments let furnished |
Currency transfer | Exchange margin | Use a specialist provider and agree the rate in advance |
Worked example: buying a £250,000 apartment as a non-resident investor
Item | Amount |
|---|---|
Purchase price | £250,000 |
SDLT, non-resident additional property | £20,000 |
Legal fees (typical range) | £1,500–£3,000 |
Total cash cost before furnishing | £271,500–£273,000 |
That total, not the price, is the base for a true net yield. The rental yields guide runs the same apartment through to net income.
What does it cost to own a UK rental property?
- Service charge. Paid to the managing agent for the building's upkeep, insurance of the structure, common areas, concierge and reserve fund. Ask for the budget and, on existing blocks, three years of accounts.
- Ground rent. Nil on most new leases, capped at a peppercorn by the Leasehold Reform (Ground Rent) Act 2022.
- Landlord insurance. Contents and liability cover for your apartment; the building itself is usually insured through the service charge.
- Lettings and management. Typically 10–15% of the rent for full management; fees vary.
- Compliance. Gas or electrical safety checks, Energy Performance Certificate and deposit protection.
- Council tax. Paid by the tenant while the apartment is let; by you during voids.
Keep this guide: get it as a PDF.
How is rental income taxed for non-residents?
UK rent is taxed in the UK whatever your residence. Under HMRC's Non-Resident Landlord Scheme, your letting agent, or your tenant if the rent exceeds £100 a week and there is no agent, must withhold 20% basic-rate tax from the rent and pay it to HMRC, unless HMRC approves an NRL1 application to receive rent gross. Approval does not remove the tax; it means you pay it through your annual return instead of at source.
Tax is charged on profit: rent less allowable costs such as the service charge, management fees, insurance and repairs. Mortgage interest is not deducted directly; it attracts a tax credit at the basic rate.
The April 2027 change. From April 2027, property income is taxed at its own rates of 22%, 42% and 47%, and the finance-cost credit is given at 22% (Autumn Budget 2025). For a higher-rate taxpayer, the gap between the tax on rent and the relief on interest widens. Model your net return on the new rates.
Do non-residents pay capital gains tax on UK property?
Yes. Non-residents are within UK capital gains tax on UK residential property. Residential gains are taxed at 18% or 24%, depending on your other UK income and gains. You must report the sale and pay the tax within 60 days of completion through HMRC's online service (GOV.UK). Purchase costs, including stamp duty and legal fees, are deducted from the gain. Keep every invoice from the day you reserve.
Does UK inheritance tax apply to overseas owners?
Yes. UK property is within the scope of UK inheritance tax whatever your residence or nationality. Holding it through an overseas company does not take it outside the charge. Plan your estate with an adviser who knows both the UK rules and those of your home country, and make sure your will covers the UK asset or that you hold a UK will.
Frequently asked questions
Do I pay stamp duty at exchange or at completion on an off-plan apartment?
Normally at completion. Stamp duty is charged when the purchase completes, not when you pay the exchange deposit, and your solicitor pays it to HMRC from funds you send with the balance. That matters on off-plan: the rates and surcharges in force at completion apply, which may differ from those when you signed. Budget for the current rates and keep a margin.
Does a home I own overseas count for the 5% higher rates?
Yes. The test for the higher rates for additional dwellings looks at residential property you own anywhere in the world, not only in the UK. If you own a home in Dubai, Hong Kong or anywhere else and are not replacing your main residence, a UK purchase is normally an additional dwelling and attracts the 5% surcharge, on top of the 2% for non-residents.
Is stamp duty different in Scotland and Wales?
Yes. Stamp duty land tax applies in England and Northern Ireland. Scotland charges Land and Buildings Transaction Tax and Wales charges Land Transaction Tax, each with its own bands and surcharges. The figures on this page are for England, which covers Manchester, Birmingham and Liverpool. Check the local rules before buying anywhere else in the UK.
Do I need to file a UK tax return if my agent already deducts tax?
Usually yes. If HMRC has not approved you to receive rent gross, your agent withholds 20% and pays it over, but that is a payment on account, not a final settlement. You file a return to declare the actual profit after allowable costs, which may lead to a refund or a further payment. If you are approved to receive rent gross, the return is how you pay the tax.
Will I be taxed twice on UK rental income?
The UK taxes UK rent first, whatever your residence. Whether your home country also taxes it depends on its own rules and any double taxation agreement with the UK. Many treaties give credit for UK tax paid. Some jurisdictions, including several in the Gulf, levy no personal income tax, so UK tax is the only tax. Take advice in both countries before you buy.
Who pays council tax on a let apartment?
The tenant, while the apartment is let on an assured periodic tenancy. The landlord is liable during void periods between tenancies and for property let on certain other arrangements, such as some house shares. Build a short void allowance into your budget for council tax as well as lost rent. Council tax bands and charges are set locally.
Part of our guide to investing in United Kingdom.
