Commercial Stamp Duty Key Facts
- Non-residential rates: 0% up to £150,000, 2% on £150,001–£250,000, 5% above £250,000
- No additional property surcharge on non-residential purchases
- Mixed-use properties (residential + commercial) taxed at non-residential rates
- 6+ dwelling rule: buying 6+ residential units in one transaction qualifies for non-residential rates
- Lease SDLT: calculated on both the premium and the net present value of rent
- See also our commercial stamp duty calculator page
Non-Residential SDLT Rates (2025/26)
The following rates apply to purchases of non-residential (commercial) property and to the non-residential element of mixed-use purchases in England and Northern Ireland.
| Up to £150,000 | 0% |
| £150,001 – £250,000 | 2% |
| Over £250,000 | 5% |
Non-residential property includes offices, shops, warehouses, factories, agricultural land, forests, and any land or property that is not used as a dwelling.
Worked Examples
| Property Price | Commercial SDLT | Residential SDLT (comparison) |
|---|---|---|
| £200,000 | £1,000 | £1,500 |
| £350,000 | £7,000 | £7,500 |
| £500,000 | £14,500 | £12,500 |
| £750,000 | £27,000 | £25,000 |
| £1,000,000 | £39,500 | £32,500 |
At lower price points, commercial rates are lower. At higher prices, residential standard rates can be lower because of the wider bands. However, the key advantage of commercial rates is no additional property surcharge — a residential additional property purchase at £500,000 would cost £37,500 vs £14,500 commercial.
Mixed-Use Properties
A mixed-use property contains both residential and non-residential elements. Common examples include:
- A flat above a shop or restaurant
- A farmhouse with agricultural land
- A building with both offices and residential apartments
- A pub with living quarters
Mixed-use properties are taxed at the non-residential SDLT rates, which is often advantageous because the rates are lower for most price ranges and the additional property surcharge does not apply.
The 6+ Dwelling Rule
When you purchase 6 or more residential dwellings in a single transaction (or in linked transactions), you can elect for the transaction to be treated as a non-residential purchase for SDLT purposes. This means:
- Non-residential rates apply instead of residential rates
- The additional property surcharge does not apply
- This can produce substantial savings on portfolio purchases
This election is separate from the now-abolished Multiple Dwellings Relief and remains available in the 2025/26 tax year.
SDLT on Commercial Leases
SDLT on new commercial leases is calculated on two elements:
1. Premium (Upfront Payment)
Any premium or one-off payment is taxed at the standard non-residential rates (0% / 2% / 5%).
2. Net Present Value of Rent
The total rent payable over the lease term is discounted to its net present value (NPV). SDLT on the NPV is:
- 0% on NPV up to £150,000
- 1% on NPV from £150,001 to £5,000,000
- 2% on NPV above £5,000,000
For most small to medium commercial leases, the NPV will fall within the nil-rate band, meaning no SDLT is payable on the rental element.
Related Guides
Frequently Asked Questions About Commercial Stamp Duty
Non-residential SDLT rates are: 0% up to £150,000, 2% on £150,001–£250,000, and 5% above £250,000. The additional property surcharge does not apply to commercial property.
No. The 5% additional property surcharge only applies to residential property. Commercial and non-residential purchases use the lower non-residential rates without any surcharge.
A mixed-use property has both residential and non-residential elements, such as a flat above a shop. These are taxed at the lower non-residential rates, and the additional property surcharge does not apply.
Lease SDLT is calculated on the premium (at non-residential purchase rates) plus the net present value of total rent (0% up to £150,000 NPV, 1% on £150,001–£5,000,000, 2% above £5,000,000).
Purchasing 6 or more dwellings in one transaction lets you elect for non-residential SDLT rates, avoiding the additional property surcharge and potentially reducing tax significantly.