One of the first questions that overseas property investors ask when buying real estate in the UK is: how much stamp duty do I need to pay in the UK?

Stamp duty forms a large proportion of the total property purchase cost; as such, it's one of the most important aspects of the cost of investment that you will need to account for. For those that are unfamiliar, stamp duty land tax (SDLT) is a tax payable to the UK Government whenever a property is purchased.

How much stamp duty do overseas investors need to pay?

Currently, stamp duty is calculated through a tiered basis. Take note that these rates are only applicable to properties located in England and Northern Ireland.

The UK Government also requires foreigners (non-UK residents) to pay an extra 2%. You're considered a UK resident if you've been in the UK for 183 days in the twelve months before your purchase completes. These don't have be consecutive days.

If you're purchasing with a spouse or partner, and only one of you meets the criteria, both of you will be considered UK residents.

On the flip side, if you have a group of buyers and none are married, and at least one of you is non-UK resident, the whole group is deemed non-UK resident.

The surcharge applies to any non-resident buyer, regardless of whether you buy as a company, or as an individual. There are exceptions, such as for REITs.