Stamp Duty Reform Urged: What it Means for Landlords

Parliament’s cross-party Housing, Communities and Local Government Committee has called on the government to consult on alternatives to stamp duty by the end of 2026. The headline aim is helping first-time buyers, but the reform debate could reshape the rules — and the 5% surcharge — that landlords pay on every additional property.The stamp duty reform recommendation at a glance:

• The HCLG Committee published its report on 9 June 2026 and wants a full consultation launched before the end of 2026.
• Options on the table include replacing stamp duty with a revenue-neutral alternative, lower rates, revised banding, and updated reliefs.
• The committee recommends reforming stamp duty alongside council tax.
• Landlords and second-home buyers have paid a 5% surcharge on additional properties since 31 October 2024, up from 3%.

Why the committee wants change

Home ownership in England has slid over two decades, the committee said, and stamp duty is part of the problem. Its chair, Florence Eshalomi MP, said that for many people, especially those without family help, “the prospect of owning a home is little more than a pipe dream.”The report itself describes Stamp Duty Land Tax as a transaction tax that reduces affordability, “slows the property market, and ultimately damages the economy.”That view is widely shared: a House of Commons Library briefing notes that most economists regard the design of stamp duty as detrimental to the housing market and to labour mobility, and that the Institute for Fiscal Studies has long argued the tax should be abolished. The Treasury Committee has previously called it a priority for reform.The government, however, has said it does not intend to abolish stamp duty, pointing to the billions of pounds it raises for the Treasury each year. That tension — between economists who want the tax gone and a Treasury that relies on it — is exactly what any consultation would have to resolve.

What stamp duty reform would mean for landlords

Although the report is framed around first-time buyers, the landlord surcharge sits inside the same system. Since 31 October 2024, additional dwellings have carried a 5% surcharge on top of the standard residential rates, up from 3% at the Autumn Budget 2024. After the April 2025 threshold changes, that means a band-by-band rate of 5% up to £125,000, 7% from £125,001 to £250,000, 10% from £250,001 to £925,000, 15% from £925,001 to £1.5 million, and 17% above that.In cash terms, a landlord buying a £200,000 buy-to-let now faces roughly £11,500 in stamp duty. On a £300,000 purchase, the increase from a 3% to a 5% surcharge alone added £6,000 to the bill. A landlord buying five £200,000 properties pays about £20,000 more in surcharge than under the old 3% rate. Overseas buyers pay a further 2% on top, and companies buying dwellings over £500,000 may face a flat 17% rate.Whether reform changes any of this is unclear. Most commentators think it is unlikely to remove the surcharge on additional properties — and, given the political direction of travel, landlords may even see it rise rather than fall.

The refund many landlords miss

One feature of the current rules is widely overlooked. A buyer who completes on a new main home before selling the previous one pays the 5% surcharge upfront, but may reclaim it if the old home is sold within 36 months. Under GOV.UK guidance on the higher rates, the refund has to be claimed within 12 months of selling the previous main residence, or within 12 months of the stamp duty filing deadline, whichever is later.On higher-value purchases those refunds can run to tens of thousands of pounds, yet many buyers and landlords never realise they qualify.Other routes exist too: a property bought in a condition unsuitable to be lived in — no working kitchen or bathroom, or serious structural problems — may not attract the higher rates, and genuinely mixed-use property is taxed at lower non-residential rates. Multiple Dwellings Relief was abolished from 1 June 2024, though claims relating to completions before that date may still be possible.A word of caution. Cold-calling firms aggressively market stamp duty refund claims, often on uninhabitable or mixed-use grounds, that may not stand up to HMRC scrutiny. An incorrect claim may have to be repaid with interest and penalties, so any claim is best made on proper advice rather than off the back of a sales call.

How complicated the system has become

A recent episode shows how tangled stamp duty has grown. The Renters’ Rights Act 2025 abolished fixed-term tenancies from 1 May 2026, converting most into rolling periodic tenancies. Under a long-standing “growing lease” rule, a continuing periodic tenancy has to be recalculated each year, and stamp duty could eventually fall due once the net present value of the rent passes £125,000. An estimated 150,000 or more households could have been drawn into annual filing over three years.The government confirmed on 22 April 2026 that it will legislate retrospectively so that no one is newly brought into stamp duty as a result of the change, and HMRC has said it will not collect the charge on the rent element in the meantime. The reform campaigners’ point is simply that a system needing emergency fixes of this kind is overdue for a proper look.

What landlords should do now

So what does this mean if you own, or are about to buy, additional property?

1. Check whether you are owed a refund. If you bought a new main home before selling your previous one and sold the old home within 36 months, you may be able to reclaim the 5% you paid upfront — potentially worth thousands.
2. Build the surcharge into your sums. Factor the 5% into any new acquisition, plus the extra 2% if you are buying from overseas.
3. Look at the property’s condition and use. An uninhabitable or genuinely mixed-use property may be taxed differently, but take qualified professional advice rather than acting on a cold call.
4. Watch for the consultation. Expected before the end of 2026, it could change rates, reliefs and thresholds — though dramatic cuts for additional properties look unlikely given the revenue at stake.

If you think you may be due a refund, Tax Rebate Services can help you check the position before you claim — you can read more in our landlord tax FAQs.

Key takeaways

• A cross-party committee wants the government to consult on replacing or overhauling stamp duty by the end of 2026.
• The reform is aimed at first-time buyers, but the 5% surcharge you pay on additional properties is part of the same system.
• Reform is unlikely to remove the surcharge — and the direction of travel could mean further rises rather than cuts.
• If you bought a new main home before selling your old one, you may be able to reclaim the surcharge where you sold within 36 months — but the claim window is tight.
• Be cautious of cold-calling refund firms; an incorrect claim may have to be repaid with interest and penalties.