SDLT Non-Residential Rates 2025/26
Non-residential SDLT applies to commercial properties (shops, offices, industrial units), agricultural land, mixed-use properties (part residential, part commercial), and 6+ residential units in a single transaction (which can elect for non-residential rates).
Non-Residential Freehold Purchase Rates
| Purchase price band | SDLT rate |
|---|
| Up to £150,000 | 0% |
| £150,001 – £250,000 | 2% |
| Over £250,000 | 5% |
Example: £400,000 commercial property
- £0 – £150,000: 0% = £0
- £150,001 – £250,000: 2% = £2,000
- £250,001 – £400,000: 5% = £7,500
- Total SDLT: £9,500 (2.375% effective rate)
Mixed-Use Property
If a property has both residential and commercial elements (e.g., a shop with a flat above), the buyer can elect for non-residential rates on the whole transaction. This is often significantly cheaper than paying residential SDLT rates on the residential portion, especially for higher value properties.
Non-Residential Leases
SDLT on new non-residential leases is based on: (1) the net present value (NPV) of rent over the lease term, plus (2) any premium paid. NPV above £150,000 is taxed at 1% for non-residential leases.
Scotland and Wales
Scotland uses LBTT (Land and Buildings Transaction Tax) and Wales uses LTT (Land Transaction Tax) — different rates apply. This calculator covers England and Northern Ireland only.
Frequently Asked Questions
What are the SDLT rates for commercial property in 2025/26?
Non-residential SDLT rates are: 0% up to £150,000; 2% on £150,001–£250,000; 5% above £250,000. These are applied on a 'slice' basis — each rate only applies to the portion of the price within that band, not the full purchase price.
Is SDLT cheaper on commercial than residential property?
Usually yes for higher value properties. Residential SDLT goes up to 12% (plus 3% surcharge for second properties). Commercial SDLT maxes at 5%. For a £1 million property: residential SDLT £43,750 (plus surcharges); commercial SDLT £39,500.
What counts as mixed-use for SDLT?
A mixed-use property has both residential and non-residential elements. Classic examples: a pub with owner's flat; a shop with flat above; a farmhouse with agricultural land and outbuildings. The non-residential element must be genuine — not just a garden shed — to qualify for non-residential rates.
Can buying 6 residential properties together use commercial rates?
Yes. Purchasing 6 or more separate residential units in a single transaction allows you to elect for non-residential SDLT rates on the whole transaction, which is usually cheaper. Alternatively, you can use Multiple Dwellings Relief (MDR) — compare both to find the lower tax.
Is there a 3% surcharge on commercial property?
No. The 3% SDLT surcharge (and 5% from October 2024 onwards for companies) only applies to additional residential dwellings, not commercial or mixed-use property. Corporate buyers don't face extra surcharges on purely commercial property.
What is SDLT on a commercial lease?
For non-residential leases, SDLT is charged on (1) the net present value of rent (1% on NPV over £150,000, using HMRC's 3.5% discount rate) and (2) any premium paid (standard non-residential rates apply to the premium). A 5-year lease at £50,000/year: NPV ≈ £224,000 → SDLT of about £740.
Do I pay SDLT if I buy a commercial property at auction?
Yes. SDLT is due on the hammer price plus any buyer's premium that forms part of the consideration. You have 14 days from completion to file and pay SDLT via HMRC's online service.
What is the SDLT filing deadline for commercial property?
SDLT must be filed and paid within 14 days of the completion date (the effective date of the transaction). Late filing attracts automatic penalties: £100 for up to 3 months late, £200 for 3-12 months, plus interest on unpaid tax.