SDLT for Corporate Property Purchases

When your company purchases property in the UK, different Stamp Duty Land Tax (SDLT) rules apply compared to individual buyers. Companies face higher rates on certain residential purchases, but reliefs are available depending on how the property will be used and the structure of the transaction.

The 17% corporate rate for residential property

If your company or corporate body buys a residential property worth more than £500,000, SDLT is charged at a flat rate of 17%. This higher rate applies to:

• Companies
• Partnerships where one or more partners is a company
• Collective investment schemes

This 17% rate replaced a previous corporate rate structure on 31 October 2024.

The 17% rate does not apply if a company is acting as a trustee of a settlement when buying the property.

Companies subject to this rate may also need to pay Annual Tax on Enveloped Dwellings (ATED), a separate annual charge on high-value residential properties held by companies.

Reliefs from the 17% rate

Your company can claim relief from the 17% rate if the property meets specific conditions. Relief is available when the property is:

Used in a property rental business – properties purchased to let to tenants qualify for relief

Bought by a property developer or trader – if your company develops or trades in property as its business

Used in a trade involving making the property available to the public – such as hotels, guest houses, or similar businesses where the public has access

Bought by a financial institution in the course of lending – when a bank or similar institution acquires property through its lending activities

Occupied by employees of the purchaser – properties provided for staff accommodation

A farmhouse – agricultural properties that qualify as farmhouses

Bought by a qualifying housing co-operative – where the company meets the specific criteria for housing co-operatives

Each relief has particular conditions that must be met. You need to demonstrate that the property genuinely falls within one of these categories.

Homes for Ukraine Scheme

If your company already qualifies for relief from the 17% rate, that relief continues to apply if the property is occupied by individuals granted entry under the Homes for Ukraine Sponsorship Scheme or the Ukraine Permission Extension Scheme.

Relief will not be withdrawn if the property is occupied by people under these schemes, or if you're taking steps without delay to use the property as part of these schemes.

Additional surcharges on corporate purchases

Beyond the 17% rate, companies face additional SDLT charges on residential property:

5% company surcharge – this applies to residential properties bought by companies and is added on top of standard residential SDLT rates (when the 17% rate doesn't apply)

2% non-UK resident surcharge – if your company is a non-UK resident purchasing residential property in England or Northern Ireland (from 1 April 2021 onwards), a 2% surcharge applies on top of all other SDLT rates, including the 5% company surcharge

These surcharges can stack, meaning a non-UK resident company could pay both the 5% and 2% surcharges in addition to standard SDLT rates.

Pre-completion transactions

Special SDLT rules apply to pre-completion transactions involving companies. These are situations where rights in a property purchase contract are transferred before completion takes place.

The rules for pre-completion transactions are set out in Schedule 2A of the Finance Act 2003. The current regime replaced older transfer of rights rules and applies to pre-completion transactions entered into on or after the date the Finance Act 2013 received Royal Assent.

These rules can affect corporate property purchases where contracts are assigned or novated before completion, and different SDLT treatment may apply depending on the structure of the transaction.

Corporate restructures

Companies undertaking property transactions as part of corporate restructures may qualify for specific SDLT reliefs. The availability and scope of these reliefs depend on the nature of the restructure and the relationship between the companies involved.

Planning your corporate property purchase

When buying property through a company in the 2025/26 tax year, you should:

• Calculate whether the 17% rate applies to your purchase
• Check if any reliefs are available based on the property's intended use
• Factor in the 5% company surcharge for residential purchases not subject to the 17% rate
• Determine if the 2% non-UK resident surcharge applies to your company
• Consider whether pre-completion transaction rules affect your purchase structure
• Plan for potential ATED liabilities if holding high-value residential property

The SDLT implications of corporate property ownership can be complex, particularly when multiple surcharges apply or when structuring transactions to qualify for relief.

Sources

• Stamp Duty Land Tax: corporate bodies
• Stamp Duty Land Tax (SDLT) pre-completion transactions rules

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.