Considering buying a second home in Bath or Bradford on Avon? You’re certainly not alone.
These sought-after locations are surrounded by beautiful countryside, rich in history, and offer a vibrant cultural scene and relaxed way of life, making them perfect for weekend escapes, future retirement spots, shrewd rental investments or holiday homes.
Aside from the benefits of buying a second home, there are several financial and legal considerations that you should factor in before making a decision, including taxation on second homes. This includes Stamp Duty, Council Tax, Capital Gains Tax and second home insurance.
We’ve created this guide to highlight the pros and cons and then walk you through key factors so you are fully informed about buying a second home.
What are the pros and cons of buying a second home?
Buying a second home can provide you with a retreat from city life, a holiday home, a rental opportunity or a wise investment for the future.
Bath and Bradford on Avon’s beautiful, lush countryside, rich history, vibrant cultural life and excellent transportation links make them among the UK’s most popular locations for second homes.
However, as with every key life decision, there are certain pros and cons you should take into consideration before you invest.
| Pros of Owning a Second Home in Bath or Bradford on Avon | Cons of Owning a Second Home in Bath or Bradford on Avon |
| Excellent quality of life: Beautiful scenic views, historical charm, rich culture and a slower pace of life than the capital city. | Additional taxes: You will face higher Stamp Duty, Council tax and Capital Gains Tax on a second home. The costs can soon add up. |
| Good investment potential: There is consistent growth in the local property market | Complexity of getting a mortgage: The rules are usually stricter for getting a second mortgage and require a higher deposit. |
| Strong rental market: The strong property market for buying, selling and renting property in Bath and Bradford makes it easier to find tenants. | Harder to maintain: Second properties are harder to take care of from a distance. |
| Future planning: Bath and Bradford are fantastic places to retire or relocate for a new lifestyle. | Cost per use: It could be more expensive to keep a second home if you don’t spend much time there. |
Mortgage loans for your second home- will you need one?
Before you start looking for a second home in Bath or Bradford on Avon, take a few moments to consider what you can afford. Will you be buying in cash, or will you need a mortgage?
If you need a mortgage for your second home, you have two options: you can get a second mortgage or use the equity on your current mortgage (remortgage).
A new mortgage loan for your second home
If you want a second home mortgage, you’ll typically need a large deposit (over 25%) and an excellent credit score to show you are a reliable borrower.
Additionally, you should be able to prove that you can afford your mortgage repayments on both your main and second home. If you are buying to rent, it helps to provide potential mortgage lenders with the potential rental income to secure your mortgage.
Remortgaging your main home
You can also buy a second home using equity – that is, the difference between your property’s current market value and the amount you still owe on your mortgage. This could be enough to allow you to increase the mortgage on your first home so you can release the money to buy a second home.
As with new mortgages, you may also need a deposit of around 25% and must prove that you can afford the repayments.
Tip: When considering getting a mortgage loan for a second home, ensure you include other fees and taxes such as valuation costs, arrangement fees, legal fees, early repayment fees, Stamp Duty, Capital Gains Tax, Insurance and Council tax to ensure you can afford a second home before you take out a mortgage.
What are the additional costs of buying a second home?
When you buy a second home in the UK, you will need to budget for several additional costs and taxes.
These will include Stamp Duty Land Tax (SDLT), Capital Gains Tax (CGT), Council Tax and Second Home Insurance, depending on your unique circumstances.
How much is Stamp Duty on a Second Home?
Stamp Duty Land Tax is a tax that is owed when you buy a property or land over a certain price in England and Northern Ireland.
When buying a second home valued over £40,000, you need to pay a Stamp Duty surcharge of 5% on top of SDLT rates. The exact amount depends on the value of your property and your circumstances. Visit this SDLT calculator to get an estimation of how much you may owe.
Stamp Duty Rates 2025: England and Northern Ireland
| Purchase price | Stamp duty rate | Stamp duty on second home |
| Up to £125,000 | 0% | 5% |
| £125,001 to £250,000 | 2% | 7% |
| £250,001 to £925,000 | 5% | 10% |
| £925,001 up to £1.5 million | 10% | 15% |
| Over £1.5 million | 12% | 17% |
If you’re not a resident of the UK (present for at least 183 days per year) during the 12 months before you purchase, you’ll also pay a 2% surcharge for a residential property in England or Northern Ireland. However, this does depend on your circumstances, and you may be eligible for a refund.
You may not have to pay a surcharge on certain properties, transactions or if you’re a particular type of buyer.
Different rates apply in Scotland and Wales.
How much is Council Tax on second homes?
Council Tax is a local tax paid in the UK on domestic properties and must be paid for every home. This is a fixed charge based on the value of the property and which ‘band’ (from A to H) it falls into. Find out what Bath Council Tax Bands are here.
While second homes have always been subject to Council Tax, potential charges increased significantly in April 2025. Councils can now charge up to 100% council tax on furnished homes not used as a sole or main residence as a result of the Levelling Up and Regeneration Act 2023.
This could mean you end up paying twice the amount of Council Tax on your second home in the UK as you would have previously.
We recommend you check the Bath and North East Somerset Council website for more information.
Do I need second home insurance?
Home insurance for your second home is not a legal requirement, although some mortgage lenders will ask to see your policy before approving your mortgage loan. We also highly recommend you have the correct insurance to protect your investment.
Many standard home insurance policies don’t cover a second home because they have a 30-day limit on leaving the property empty. There is also a strict definition of second homes when it comes to insurance, so check yours to ensure you are covered.
If not, look for a second home insurance policy that covers the increased risk of leaving your home unoccupied for long periods, having paying tenants, alternative accommodation and legal liability.
We advise that you get Buildings Insurance to cover the structure and Contents Insurance to cover anything you own inside. If you live abroad or won’t be present for long periods, look into Holiday Home Insurance Policies or Unoccupied Home Cover.
How much is Capital Gains Tax on second homes?
While you won’t have to pay Capital Gains Tax when you buy a second home in Bath or Bradford on Avon, you may be liable if you sell your second home and make a profit in the future.
How much you will pay depends on your taxpayer status: there are different rates for basic rate taxpayers, higher or additional rate taxpayers, and non-UK residents.
UK residents who are basic rate taxpayers pay 18% CGT on gains made on their second home, depending on the size of their gain and taxable income. Whereas higher or additional rate taxpayers pay 24% CGT on gains made on their second home.
Couples who jointly own a second home can combine their allowances and reduce the amount of Capital Gains Tax they need to pay.
Non-UK residents are also subject to Capital Gains Tax when selling a second home and do not benefit from a tax-free allowance.
Whether a UK resident or not, everyone must report their UK property sale to HMRC within 60 days and pay Capital Gains Tax if liable. Visit the UK government website to calculate what you could owe.
What if you’re buying a second home from abroad?
It may be more challenging to buy a second home in Bath or Bradford on Avon if you are abroad, but it’s certainly worth the effort. We cover this in much more detail in our guide here[SS1] , but some of the basics to bear in mind are covered below:
- Hire a UK solicitor to handle the legal aspects of buying your second home, including checking the property’s title, arranging for contracts, and ensuring all legal requirements are met.
- Explore your mortgage options and fees: You’ll usually pay a larger deposit (over 25%) and be subject to higher interest rates.
- Ensure you are aware of what you are paying when transferring funds. Currency exchange rates and transaction fees can soon add up.
- Do your research and find out about your legal and tax obligations when buying a second home in the UK. You will still be liable for Stamp Duty, Council Tax and Capital Gains Tax.
- Get smart about tax: You could be eligible for tax relief under the UK’s double taxation treaties. Ask a tax advisor for specifics on your situation.
- Find out whether buying a second home in the UK could have tax implications in your home country.
- Consider getting a property management service to look after your property, handle tenants or maintain your property while you are away.
Remember, our team at Cobb Farr can also help you find your ideal second home or holiday home, navigate your legal requirements, and put you in touch with trusted legal and financial partners.
Summary
Buying a second home in Bath or Bradford on Avon can be a life-changing decision and an astute investment option, provided you know the financial implications and legal costs.
In this article, we’ve explained your obligations when it comes to Stamp Duty, Council Tax, Capital Gains tax and second home insurance, plus provided further resources that can help you calculate whether you are liable and how much you may need to pay.
If you’re buying from abroad, we recommend you contact professional tax experts to handle everything and ensure you meet your legal requirements.
By doing so, you can focus on enjoying your second home in Bath or Bradford on Avon and prepare for the big move without stress or nasty surprises. Here at Cobb Farr, we understand the unique challenges and rewards of buying a second home, especially from abroad. Contact us today, and our experienced team can help guide you through the local market, connect you with trusted legal and financial partners, and find your dream second home.
