Commercial SDLT: Lower rate regime for non-residential and mixed-use property in England and Northern Ireland. No additional property surcharge applies. If you are buying residential property through a limited company, switch to the Limited Company tab; for holiday lets switch to Holiday Let.
Total Stamp Duty
£14,500
Effective rate: 2.90%
| Band | Rate | Taxable Amount | Tax |
|---|---|---|---|
| £0 - £150,000 | 0.0% | £150,000 | £0 |
| £150,000 - £250,000 | 2.0% | £100,000 | £2,000 |
| £250,000 - Above | 5.0% | £250,000 | £12,500 |
Residential comparison: If this were a residential property, you would pay £15,000 in Stamp Duty (more than commercial rates).
Disclaimer: This tool does not constitute financial advice. We do not recommend taking actions based solely on these results. The calculator makes assumptions and results may be inaccurate due to changes in government policy, interest rates, or personal circumstances. You use this information at your own risk. We can't guarantee to be perfect, so do note you use the information at your own risk and we can't accept liability if things go wrong. For official guidance, visit Gov UK.
Commercial SDLT Rates 2026
Purchase or Lease Premium Rates
| Property Price | SDLT Rate |
|---|---|
| Up to £150,000 | 0% |
| £150,001 to £250,000 | 2% |
| Over £250,000 | 5% |
New Lease: Net Present Value (NPV) Rates
| Net Present Value | SDLT Rate |
|---|---|
| Up to £150,000 | 0% |
| £150,001 to £5,000,000 | 1% |
| Over £5,000,000 | 2% |
NPV is calculated by discounting future rent payments at 3.5% per year. Lease SDLT is charged on both the NPV of rent and any premium paid.
When Do Commercial Rates Apply?
Commercial (non-residential) SDLT rates apply to the following property types. Use our main stamp duty calculator for residential purchases.
- Commercial buildings: Shops, offices, warehouses, factories, hotels, and other business premises
- Land without buildings: Vacant land, development sites, and plots for commercial use
- Agricultural land: Farmland, agricultural buildings, and farming businesses
- Forests and woodland: Commercial forestry and timber operations
- Bulk residential purchases: Six or more residential dwellings in a single transaction are treated as non-residential (see the six-dwelling rule behind Britain's biggest home sale)
- Mixed-use properties: Part residential and part commercial (e.g., a shop with a flat above) qualify for commercial rates on the whole price
- Other non-residential: Car parks, petrol stations, storage facilities and data centres
Non-residential property is everything that is not residential, and the key test is whether a building is used as a dwelling or is suitable for use as one (FA 2003 s116). The property does not need to be actively trading at the point of purchase: agricultural land with no buildings on it still qualifies, and so does a derelict commercial building that is not suitable for use as a dwelling.
Pro tip: If you are buying a mixed-use property (e.g., a shop with a flat), you pay commercial SDLT rates, often substantially lower than residential rates for properties over £250,000.
VAT on Commercial Property and Its Effect on SDLT
Commercial property can carry VAT, and this changes the stamp duty figure in a way that catches buyers out. If the seller has "opted to tax", VAT at 20% is added to the purchase price, and SDLT is then calculated on the VAT-inclusive price.
- A VAT-registered buyer can usually reclaim the VAT itself
- But no one can reclaim the extra SDLT that the VAT caused
- On a £1,000,000 opted property, the £200,000 of VAT adds £10,000 of permanently unrecoverable SDLT
Always confirm the VAT position with the seller before exchange, because the headline price and the SDLT-relevant price are not the same number.
SDLT on Commercial Leases
A commercial lease can attract SDLT on two separate elements, and they are assessed independently.
The premium (any upfront payment for the lease) is taxed at the standard non-residential rates shown above. The rent is taxed separately on its Net Present Value across the whole lease term:
- 0% on NPV up to £150,000
- 1% on NPV between £150,001 and £5,000,000
- 2% on NPV above £5,000,000
Because NPV discounts future rent back to present value, it is not simply rent multiplied by years. Work the figure out with our lease NPV calculator, and see the lease transactions guide for how the two elements are reported together.
Worked Examples
Example 1: £500,000 Office Purchase
Effective rate: 2.9%
Example 2: £1,000,000 Warehouse Purchase
Effective rate: 3.95%
Example 3: 10-Year Lease (£300k Premium, £50k Annual Rent)
Premium SDLT
Rent NPV SDLT
Mixed-Use Properties
A mixed-use property contains both residential and commercial elements. Common examples include a shop with a flat above, a pub with living accommodation, a farm with a farmhouse, or an office building with a residential caretaker's flat.
Even if the residential element is substantial, the whole purchase is taxed at non-residential rates if part of it is genuinely non-residential, meaning it is not used or suitable for use as a dwelling. Working from home does not qualify: a home office normally remains suitable for use as part of the dwelling (HMRC SDLTM00390). This often results in a lower SDLT bill than residential rates. For a purchase of this type, the mixed use stamp duty calculator is the quicker tool, and our guide to stamp duty on mixed use property covers how HMRC decides whether the commercial element is genuine.
Example: A £400,000 mixed-use property (shop with flat) pays £9,500 SDLT at commercial rates, vs £10,000 at residential standard rates. The real saving comes if you already own property: residential with the 5% surcharge would be £30,000, while commercial remains £9,500, a saving of £20,500.
Commercial vs Residential Rates Comparison
| Property Price | Commercial SDLT | Residential SDLT | Saving |
|---|---|---|---|
| £200,000 | £1,000 | £1,500 | £500 |
| £300,000 | £4,500 | £5,000 | £500 |
| £500,000 | £14,500 | £15,000 | £500 |
| £1,000,000 | £39,500 | £43,750 | £4,250 |
| £2,000,000 | £89,500 | £153,750 | £64,250 |
Residential rates shown are standard rates without surcharges or first-time buyer relief. Commercial rates become increasingly advantageous on higher-value properties.
Reliefs That Change the Figure
The calculator applies the standard non-residential bands. Some purchases qualify for a relief that reduces or removes the bill, claimed on the SDLT return. Check these before you rely on the figure:
- Group relief: a transfer between companies in the same group can be fully relieved (FA 2003 Sch 7). It is withdrawn if the buyer leaves the group within three years of the effective date.
- Charities relief: a charity buying land or property for charitable purposes can claim relief (FA 2003 Sch 8).
- Freeport and Investment Zone relief: land in a designated special tax site in England, bought for a commercial trade, development for resale, or letting as non-residential property. Transactions must take place by 30 September 2031 for Freeports and 30 September 2034 for Investment Zones. Residential property does not qualify.
- Six or more dwellings: not a relief, but buying six or more dwellings in a single transaction puts the whole purchase on these non-residential rates automatically.
GOV.UK lists every relief and how to claim it: SDLT relief for land or property transactions.
Commercial Property FAQs
What stamp duty rates apply to commercial property purchases?
Commercial (non-residential) SDLT rates are 0% up to £150,000, 2% on £150,001 to £250,000, and 5% on the portion above £250,000. There is no additional property surcharge regardless of how many other properties you own, which makes commercial rates significantly lower than residential rates for higher-value purchases.
Do I pay commercial or residential SDLT on a mixed-use property?
Mixed-use properties (for example a shop with a flat above, or a pub with living accommodation) qualify for commercial SDLT rates on the entire purchase price, provided part of the property is genuinely non-residential, meaning it is not used or suitable for use as a dwelling. This is true even if the residential element is substantial. A home office does not count. Mixed-use treatment can save tens of thousands compared to residential rates with the additional property surcharge.
How is SDLT calculated on commercial leases?
Commercial lease SDLT is charged on two components: the premium (using the standard 0% / 2% / 5% bands) and the Net Present Value (NPV) of rent. NPV is the discounted value of future rent at 3.5% per annum. NPV bands are 0% up to £150,000, 1% on £150,001 to £5,000,000, and 2% above £5 million. Both components are added together for the total bill.
What counts as commercial or non-residential property for SDLT?
Commercial property includes shops, offices, warehouses, factories, hotels, agricultural land, woodland, vacant development land, and bulk residential purchases of six or more dwellings in a single transaction. Mixed-use properties also qualify for commercial rates on the whole purchase, even if residential use dominates, as long as the non-residential part is genuine.
Is there a non-resident surcharge on commercial property?
No. The 2% non-resident SDLT surcharge applies only to residential property purchases by non-UK residents. Commercial property is exempt, which is one reason overseas investors often prefer commercial UK property.
Related Resources
Business Property Hub
Complete guide to SDLT on business and commercial property purchases
SPV Property Investment Guide
Setting up an SPV for property investment, structuring options
Stamp Duty on Holiday Lets
Residential rates plus the 5% surcharge, and when non-residential rates apply
Corporate Buyer Complete Guide
Everything you need to know about buying property as a company
Limited Company vs Personal Comparison
Compare SDLT and overall costs between company and personal purchase
Residential SDLT Calculator
Calculate stamp duty for residential property purchases in England
Reviewed by
Julie White
ACAStamp duty specialist since 1999Stamp Duty Land Tax Specialist
ACA and Tax Adviser with a career spanning nearly four decades, specialising in stamp duty planning and advisory work since 1999.