Advanced Taxation (UK) · Stamp taxes (stamp duty, stamp duty reserve tax and stamp duty land tax)

Stamp Duty Land Tax on Non-Residential Property

Updated 11 October 2026 · Fact-checked

SDLT is a tax paid by the buyer on land transactions in England and Northern Ireland. For non-residential and mixed-use property, you apply slice rates to the chargeable consideration: 0% up to £150,000, 2% from £150,001 to £250,000 and 5% above £250,000. Add each slice together to get the SDLT due.

Understand Stamp Duty Land Tax on Non-Residential Property

Stamp duty land tax (SDLT) is a tax on the buyer when land or buildings are acquired. In ATX-UK it appears as a cost of buying commercial property, so it affects the cash a client needs and the comparison of alternative courses of action.

For non-residential property, such as shops, offices and factories, SDLT uses slice rates. Each band of the price is taxed at its own rate, like income tax bands. This is not a slab system where one rate applies to the whole price. The rates in the ACCA tax tables are 0% up to £150,000, 2% from £150,001 to £250,000 and 5% on the amount above £250,000.

A mixed-use transaction, for example a shop with a flat above it, is treated as non-residential. So you use the non-residential rates for the whole price. You do not split the price between the residential and non-residential parts. The tax tables give only the non-residential rates, so you should not need to use any other rates for this.

The tax is charged on the chargeable consideration. This is usually the price paid, but it can include other things given for the land, such as the value of non-cash items or liabilities taken over. Read the scenario for any extra amounts that form part of what the buyer gives. The tax is the buyer's cost, so it is not deducted from the seller's proceeds. For the buyer, it is normally added to the cost of the asset when computing a later gain, which links this topic to capital gains.

Key rules to remember

Non-residential SDLT slice rates: 0% on the first £150,000; 2% on £150,001 to £250,000; 5% on the excess over £250,000; These are the rates in the ACCA tax tables for the exam. Apply each rate only to the slice of the price within that band.
SDLT on a price above £250,000: SDLT = (£250,000 − £150,000) × 2% + (Price − £250,000) × 5% = £2,000 + (Price − £250,000) × 5%; Quick form of the same calculation. It works only when the price is over £250,000.
SDLT on a price from £150,001 to £250,000: SDLT = (Price − £150,000) × 2%; Maximum is £2,000 at a price of £250,000.
Mixed-use rule: Mixed-use transaction: use the non-residential rates on the whole chargeable consideration; Do not split the price between the residential and non-residential elements.
Stamp duty on shares (for contrast): 0.5% of the consideration; Do not confuse this with SDLT. Shares attract stamp duty, not SDLT.

How to solve Stamp Duty Land Tax on Non-Residential Property questions

Use the same short method for any SDLT question on a non-residential or mixed-use purchase.

1Identify the transaction. Check that it is a purchase of land or buildings, and decide whether it is non-residential or mixed-use. Both use the non-residential rates.
2Find the chargeable consideration. Start with the price and add any other amounts the buyer gives for the land that the scenario states.
3Take the tax table slices: £0 to £150,000 at 0%, £150,001 to £250,000 at 2% and the excess over £250,000 at 5%.
4Work out how much of the consideration falls in each slice. Do not apply a single rate to the whole amount.
5Multiply each slice by its rate and add the results. Show every line as workings.
6State who pays. SDLT is the buyer's cost and increases the total cash the buyer needs.
7Link the answer to the question. If asked to compare options or advise on cost, say how the SDLT affects the decision.

Quickest way: The £2,000 shortcut

When to use it: Use it when the price is above £250,000 and you need the SDLT fast.

Check the price is over £250,000.
Write £2,000 as the tax on the 2% slice (£100,000 × 2%).
Subtract £250,000 from the price and multiply the excess by 5%.
Add the two figures. Still show the slices in your workings so you earn the method marks.

Common mistakes in Stamp Duty Land Tax on Non-Residential Property

Applying one rate to the whole price
Students treat the rate like a slab, as if 5% applied to everything once the price passes £250,000.
Fix: Remember that the rates are slice rates. Tax only the part of the price inside each band.
Using residential rates for a mixed-use property
The flat above the shop looks residential, so students split the price or use residential rates.
Fix: Treat a mixed-use transaction as non-residential and use the non-residential rates on the whole price.
Missing extra chargeable consideration
Students stop at the headline price and ignore other amounts the scenario says the buyer provides.
Fix: Re-read the facts and add any further consideration given for the land before you calculate.
Confusing SDLT with stamp duty on shares
Both are stamp taxes and the tables list them together.
Fix: SDLT applies to land and buildings with slice rates. Stamp duty on shares is 0.5% of the consideration.
Treating SDLT as the seller's cost
Students think of the transaction tax as part of the sale.
Fix: SDLT is paid by the buyer. Include it in the buyer's total acquisition cost.

Worked examples

Example 1

Bright Ltd buys a freehold office building for £420,000. Calculate the SDLT payable.

Show the solution

The office is non-residential, so the non-residential slice rates apply.
Slice 1: £150,000 × 0% = £0.
Slice 2: (£250,000 − £150,000) = £100,000 × 2% = £2,000.
Slice 3: (£420,000 − £250,000) = £170,000 × 5% = £8,500.
Total SDLT = £0 + £2,000 + £8,500 = £10,500.

Answer: SDLT payable by Bright Ltd is £10,500.

Example 2

Rajan buys a shop with a flat above it for £200,000. The building is used partly for business and partly as a residence. Calculate the SDLT payable and explain which rates apply.

Show the solution

The purchase includes both residential and non-residential parts, so it is a mixed-use transaction.
A mixed-use transaction is treated as non-residential, so the non-residential rates apply to the whole £200,000. The price is not split.
Slice 1: £150,000 × 0% = £0.
Slice 2: (£200,000 − £150,000) = £50,000 × 2% = £1,000.
Total SDLT = £1,000.

Answer: SDLT payable is £1,000, using the non-residential rates on the whole price.

Exam tips

Always show each slice on its own line. Markers give credit for the method even if you make an arithmetic slip.
Use the tax rates given in the exam. Do not rely on memory of other rates, and do not bring in residential rates.
Check the facts for mixed-use property and extra consideration. These are the usual traps.
In planning questions, include SDLT as a cost of buying the property and state clearly that the buyer pays it.

Practice questions from Stamp taxes (stamp duty, stamp duty reserve tax and stamp duty land tax)

Stamp Duty Land Tax on Non-Residential Property: frequently asked questions

What are the SDLT rates for non-residential property in ATX-UK?

The tax tables give 0% on the first £150,000, 2% on the next £100,000 (£150,001 to £250,000) and 5% on anything above £250,000. These are slice rates, so each rate applies only to its own band.

How is SDLT calculated on mixed-use property?

A mixed-use transaction is treated as non-residential. You apply the non-residential slice rates to the whole chargeable consideration and do not split the price between the residential and non-residential parts.

Who pays SDLT on a commercial property purchase?

The buyer pays SDLT. It adds to the cost of acquiring the property, so include it when you compute the cash the buyer needs.

Is SDLT the same as stamp duty on shares?

No. SDLT applies to land and buildings with slice rates. Stamp duty on shares is charged at 0.5% on the consideration.