Company Buying Residential Property: SDLT and ATED Guide
Corporate bodies pay a flat 17% SDLT rate on residential properties above £500,000. Below that threshold, the standard 5% additional dwelling surcharge applies. ATED may also be due annually.
Last verified: April 2026 — 17% rate in force since 31 October 2024
Key Takeaways
- •Corporate bodies pay 17% flat SDLT on residential properties above £500,000 (increased from 15% on 31 October 2024).
- •Below £500,000, standard residential rates + 5% surcharge apply (effective rates: 5%/7%/10%).
- •ATED (Annual Tax on Enveloped Dwellings) applies annually on residential properties over £500,000 owned by companies.
- •Reliefs (property developer, rental business, employee accommodation) must be claimed in the SDLT return at completion — they cannot be claimed later.
- •The 17% charge makes corporate residential ownership very expensive — it is designed to discourage enveloping property in companies.
In this article
Corporate Body SDLT Rates
The SDLT regime treats corporate bodies — companies, limited liability partnerships, partnerships with a corporate member, and collective investment schemes — differently from individual buyers when it comes to residential property.
The rationale is to discourage the practice of "enveloping" residential property inside a company structure, which historically allowed owners to transfer properties via share sales rather than conveyances, avoiding SDLT on subsequent disposals.
| Price Range | Corporate Body Rate | Individual Standard Rate |
|---|---|---|
| Up to £125,000 | 5% (surcharge) | 0% |
| £125,001 – £250,000 | 7% (2% + 5% surcharge) | 2% |
| £250,001 – £500,000 | 10% (5% + 5% surcharge) | 5% |
| Above £500,000 | 17% flat on entire consideration | 5% / 10% / 12% bands |
The 17% Flat Rate
For residential properties purchased by a corporate body for more than £500,000, SDLT is charged at a flat rate of 17% on the entire consideration — not a banded rate. This means that a company buying a property for £600,000 pays 17% on the full £600,000, not just the amount above £500,000.
The 17% rate was introduced on 31 October 2024, replacing the previous 15% rate. This makes corporate residential purchases among the most heavily taxed transactions in the SDLT regime.
17% is applied to the ENTIRE purchase price — not just the excess above £500,000
A company buying a property for £501,000 pays 17% × £501,000 = £85,170 — far more than an individual buying the same property at standard rates (£15,050).
Rate history: The corporate body rate was 15% from April 2016 to October 2024. It increased to 17% as part of the Autumn Budget 2024 measures to reduce property enveloping and raise additional tax revenue from corporate property holding.
Worked Examples
Example 1: Purchase price £400,000 (below £500k threshold)
Corporate body: standard residential + 5% surcharge (higher rates)
| Band | Rate | Tax |
|---|---|---|
| £0 – £125,000 | 5% | £6,250 |
| £125,000 – £250,000 | 7% | £8,750 |
| £250,000 – £400,000 | 10% | £15,000 |
| Total (corporate body, below £500k) | £30,000 | |
Individual standard rate on £400k: £10,000 — corporate pays £20,000 more due to the 5% surcharge.
Example 2: Purchase price £750,000 (above £500k threshold)
Corporate body: 17% flat on entire consideration
17% × £750,000
| Buyer Type | SDLT on £750,000 |
|---|---|
| Individual — standard rates (first/only home) | £27,500 |
| Individual — higher rates (additional property) | £65,000 |
| Corporate body — 17% flat rate | £127,500 |
Full comparison across price points
| Price | Individual (standard) | Individual (higher rates) | Company |
|---|---|---|---|
| £400,000 | £10,000 | £30,000 | £30,000 |
| £600,000 | £20,000 | £50,000 | £102,000 |
| £750,000 | £27,500 | £65,000 | £127,500 |
| £1,000,000 | £43,750 | £93,750 | £170,000 |
ATED Annual Charges
In addition to the one-off SDLT charge on purchase, companies owning residential properties worth more than £500,000 are subject to the Annual Tax on Enveloped Dwellings (ATED). This is an annual charge due each year for the period 1 April to 31 March, with the return due by 30 April.
| Property Value | ATED Charge (2026/27) |
|---|---|
| £500,001 – £1,000,000 | £4,400 per year |
| £1,000,001 – £2,000,000 | £9,000 per year |
| £2,000,001 – £5,000,000 | £30,550 per year |
| £5,000,001 – £10,000,000 | £71,500 per year |
| £10,000,001 – £20,000,000 | £143,550 per year |
| Above £20,000,000 | £287,500 per year |
New acquisitions: Companies that acquire a property must file an ATED return within 30 days of the purchase. ATED reliefs (property development relief, property rental business relief, etc.) must be claimed in the return — they are not automatic.
Available Reliefs
Several reliefs can reduce or eliminate the 17% SDLT charge and/or ATED liability. All reliefs must be claimed in the relevant return at the time of completion (for SDLT) or by the annual return deadline (for ATED). They cannot be claimed retrospectively.
Property Developer Relief
Available where the company is a developer that acquires residential property as trading stock for the purpose of development and resale. SDLT is charged at standard rates (not 17%) and ATED does not apply. The company must be in the business of developing property and must not occupy the property.
Property Rental Business Relief
Available where the company genuinely lets the property commercially as part of a property rental business. The property must not be available for personal use by connected persons. HMRC scrutinises this relief carefully — the letting must be genuine and arm's-length.
Employee Accommodation Relief
Available where the property is provided to an employee (or director earning over £75,000 per year) as part of their employment and they occupy it as their main home. Strict conditions apply regarding the employment relationship and the nature of the occupation.
Critical: Relief must be CLAIMED in the SDLT return at completion and in the ATED return by the filing deadline. Failure to claim in time means the full 17% rate and/or ATED charge applies. HMRC has been clear that late relief claims are not accepted.
Frequently Asked Questions
Does the 17% rate apply to every company buying residential property?
Yes — any "corporate body" (company, LLP, partnership with a corporate member, collective investment scheme) purchasing a residential property above £500,000 pays 17% unless a relief applies.
Can I avoid the 17% rate by buying below £500,000?
The 17% flat rate only applies above £500,000. However, the 5% additional dwelling surcharge still applies to company purchases below £500,000, resulting in higher rates of 5%/7%/10% across the standard residential bands.
I'm buying through a SPV/property investment company — does relief apply?
Property rental business relief is available if the company genuinely intends to let the property commercially, but the criteria are strict: it must not be available for personal use by connected persons and must be genuinely run as a business.
When is ATED due?
ATED returns are due by 30 April each year. The charge is due on 30 April for the period 1 April to 31 March. New acquisitions must file within 30 days. ATED reliefs (e.g., property development, letting) must be claimed in the return.
Emma Richardson, MRICS
Chartered Surveyor & Property Tax Specialist
Emma Richardson is a RICS-qualified Chartered Surveyor with over 12 years of experience in UK property taxation. She founded Calculate My Stamp Duty UK to help buyers understand the complex world of property transaction taxes.
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