How to Avoid Stamp Duty on a Buy-to-Let Property
Stamp Duty Land Tax (SDLT) can significantly increase the cost of purchasing a buy-to-let property in the UK. However, there are legitimate strategies to reduce or avoid stamp duty – if you know where to look. Whether you’re a first-time landlord or expanding your portfolio, here’s what you need to know to keep your costs down.
What Is Stamp Duty on Buy-to-Let Properties?
As explained in a recent blog post incorporating the 2025 changes, Stamp Duty Land Tax (SDLT) is a government tax paid on property purchases in England and Northern Ireland. For buy-to-let properties, a 5%-7% surcharge applies, regardless of the property’s price.
For example, if you’re buying a second property worth £250,000:
- Standard (Residential) SDLT: £2,500
- Buy-to-let SDLT surcharge (5% on first £125,000 – £6,250 and a huge 7% on the rest – £8,750): therefore totalling £15,000
Can You Legally Avoid Stamp Duty on Buy-to-Let?
While you can’t completely eliminate stamp duty in most cases, there are legal workarounds and exemptions that may reduce or negate your liability. These include:
1. Transfer the Property to a Spouse
If your spouse doesn’t already own a property, transferring ownership to them (or buying in their name) can sometimes avoid the surcharge, especially for first-time buyers.
⚠️ Be cautious: This must be done in line with legal advice and may affect mortgage eligibility.
2. Buy Through a Limited Company
Many landlords choose to buy investment property through a limited company. While stamp duty still applies, this can offer long-term tax advantages, including:
- Corporation tax rates (often lower than personal income tax)
- Offset allowable expenses
- No capital gains tax if selling shares rather than the property
Learn more about limited company buy-to-let structures in our blogs or contact Novellus Property Management for strategic guidance.
3. Consider Multiple Dwellings Relief (MDR)
If you’re buying two or more properties in one transaction, you might be eligible for Multiple Dwellings Relief (MDR) — reducing the effective rate of SDLT across the portfolio.
Examples include:
- Blocks of flats
- Houses with annexes
- Mixed-use buildings
This requires careful planning — consult a tax advisor or property investment expert.
4. Use a Buy-to-Let Specialist Solicitor
A specialist conveyancing solicitor may identify overlooked exemptions, such as:
- Mixed-use property classification
- Commercial zoning
- Relief for inherited property
- SDLT errors in HMRC calculations
At Novellus, we work closely with conveyancers to ensure your investment is fully optimised. Our lettings and management services help you get the most from your buy-to-let.
Avoiding Stamp Duty Illegally? Don’t Risk It
Some online sources suggest shady tactics to “dodge” stamp duty. These include:
- Under-declaring property value
- Using offshore trusts
- Misclassifying property types
❌ These are illegal and could result in:
- HMRC penalties
- Interest charges
- Criminal investigation
Always work with a professional to ensure you’re compliant and protected.
Related Guides from Novellus
Conclusion: Maximise Profit, Minimise Tax
Stamp duty can be a big expense, but with the right planning, it’s possible to reduce or even avoid it. From spousal transfers to MDR claims and limited company structures, there are smart, legal ways to manage your investment costs.
Thinking of investing in Manchester’s booming rental market?
📞 Get in touch with Novellus Property Management – our expert team helps landlords make informed, profitable decisions.
