Advanced Taxation (UK) · Taxes applicable to a given situation or course of action and their impact

Stamp Duty Land Tax on Non-Residential Property

Updated 11 October 2026 · Fact-checked

SDLT is a tax the buyer pays on land transactions in England and Northern Ireland. For non-residential and mixed-use land, it is charged in slices on the purchase price: 0% to £150,000, 2% from £150,001 to £250,000, and 5% above £250,000. Work out the price in each band, apply the rate and add up.

Understand Stamp Duty Land Tax on Non-Residential Property

Stamp duty land tax (SDLT) is a tax paid by the buyer when they acquire an interest in land. It is a cost of buying, so it increases the buyer's total outlay. In ATX you meet it when a client buys a business premises, a shop, a factory, or land for investment.

The rates are progressive, like income tax. Only the part of the price inside each band is taxed at that band's rate. The ACCA tax tables give three bands for non-residential property: 0% on the first £150,000, 2% on the next £100,000 (£150,001 to £250,000), and 5% on anything above £250,000. The tables do not show the rates for residential property, so the exam will not expect you to compute residential SDLT from the tables.

Mixed-use property (for example a shop with a flat above it) is treated as non-residential. So you use the non-residential bands on the whole price. This is a common planning and exam point. Be ready to say why a building counts as mixed use.

The tax is on the chargeable consideration. That is usually the price paid, and it can include other amounts given for the land, such as debts taken over. VAT is part of the consideration if the seller has opted to tax and charges VAT on the sale. This means SDLT can be charged on the VAT-inclusive price. Check the question for whether the price is stated with or without VAT.

The SDLT is paid by the buyer, not the seller. In your answer, show it as an additional cost of acquisition. For a company buyer, the SDLT is usually capitalised into the cost of the asset for later chargeable gain purposes. The tables do not give the rules for leases, so only compute lease SDLT if the question gives you the rates or the method. Otherwise explain the principle in words. Leases are covered in a separate topic.

Key rules to remember

Non-residential SDLT bands: £0 – £150,000: 0%; £150,001 – £250,000: 2%; above £250,000: 5%; Given in the ACCA tax tables (Table 20). Rates apply only to the slice of the price in each band.
SDLT on a price above £250,000: SDLT = (£250,000 − £150,000) × 2% + (Price − £250,000) × 5% = £2,000 + 5% × (Price − £250,000); Shortcut: the first £250,000 always costs £2,000 in total.
SDLT on a price between £150,000 and £250,000: SDLT = (Price − £150,000) × 2%; No tax at all if the price is £150,000 or less.
Mixed-use rule: Mixed-use land is taxed using the non-residential bands on the whole price; Applies when the property includes both residential and non-residential parts.
Total acquisition cost: Total cost = Price + SDLT + other costs of acquisition; SDLT is paid by the buyer. For a company it forms part of the base cost of the property.

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

Use this method for any SDLT purchase question. It keeps the working clear so you pick up method marks even if a figure is wrong.

1Identify the type of property. Residential-only land is outside these tables. Non-residential or mixed-use land uses the three-band table.
2Identify the chargeable consideration. Start with the price. Check whether VAT is charged on the sale and whether any other consideration is given.
3Split the price into bands: first £150,000, next £100,000, and the excess over £250,000.
4Apply 0%, 2% and 5% to each slice. Show each slice as a separate line in your working.
5Add the slices to get the SDLT. Round to the nearest £ as the supplementary instructions require.
6State who pays: the buyer. Add the SDLT to the price and other costs to give the total acquisition cost.
7Comment on the impact: cash flow, effective rate, and any planning point such as whether the property is mixed use or whether VAT affects the amount.

Quickest way: The £2,000 shortcut

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

Check the price is more than £250,000.
Take the price over £250,000.
Multiply that excess by 5%.
Add a fixed £2,000, which is the tax on the first £250,000 (£100,000 × 2%).
Write the full band working in your answer anyway if marks are for method. Use the shortcut as a check.

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

Applying one rate to the whole price, for example 5% × the full price.
Students treat SDLT like a flat tax and forget the bands are progressive.
Fix: Always split the price into slices. Tax only the portion in each band.
Using residential assumptions for a mixed-use property.
The presence of a flat makes it look like a residential purchase.
Fix: Mixed-use land is taxed using the non-residential bands. State this in your answer.
Ignoring VAT in the price.
Students see a net price and do not check whether VAT is charged on the sale.
Fix: If VAT is charged on the sale, it forms part of the consideration for SDLT. Read the question for the VAT position and include it where it applies.
Showing SDLT as a cost for the seller.
Confusion with other taxes on disposal, such as CGT.
Fix: SDLT is paid by the buyer. Add it to the buyer's cost.
Writing a rate or band from memory that differs from the tables.
Older rates or residential rates are remembered instead.
Fix: Use the table in the exam: 0% to £150,000, 2% to £250,000, 5% above. Check the band edges.
Giving only a number without commenting on the impact.
Students stop once the calculation is complete.
Fix: Add a line on total cost, cash flow and any planning point. Written exams reward application to the scenario.

Worked examples

Example 1

Brightway Ltd buys a warehouse for £420,000. There is no VAT on the sale. Calculate the SDLT and the total cost of the property before other acquisition costs.

Show the solution

Non-residential property, so use the three-band table.
First £150,000 at 0% = £0.
Next £100,000 (£150,001 to £250,000) at 2% = £2,000.
Excess over £250,000 is £420,000 − £250,000 = £170,000, at 5% = £8,500.
SDLT = £0 + £2,000 + £8,500 = £10,500.
Check with the shortcut: £2,000 + 5% × £170,000 = £2,000 + £8,500 = £10,500.
Total cost = £420,000 + £10,500 = £430,500.

Answer: SDLT is £10,500. The total cost is £430,500.

Example 2

Priya buys a shop with a flat above it for £200,000 to run her business. The flat is let to a tenant. Explain how the SDLT is computed and calculate it.

Show the solution

The property has both commercial and residential parts, so it is mixed-use.
Mixed-use land is taxed using the non-residential bands on the whole price.
First £150,000 at 0% = £0.
The excess over £150,000 is £200,000 − £150,000 = £50,000, at 2% = £1,000.
SDLT = £1,000.
The buyer, Priya, pays this. Her total cost is £200,000 + £1,000 = £201,000 before other costs.

Answer: SDLT is £1,000, paid by Priya. The total cost is £201,000 before other acquisition costs.

Exam tips

Copy the three bands from the tax tables into your working before you start. It stops band-edge slips.
Show each band as its own line. Method marks are awarded even if the final figure is wrong.
State that SDLT is the buyer's cost and add it to the total acquisition cost.
Look for mixed-use and VAT clues in the scenario. Use them to earn the application and professional skills marks.
If the question involves a lease and gives no rates, explain the principle in words rather than inventing rates.

Practice questions from Taxes applicable to a given situation or course of action and their impact

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

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

The ACCA tax tables show 0% on the first £150,000, 2% on the portion from £150,001 to £250,000, and 5% on anything above £250,000. The rates apply to slices of the price, not the whole price.

How is mixed-use property taxed for SDLT?

Mixed-use property is treated as non-residential. You apply the non-residential bands to the whole price. A shop with a flat above is a typical example.

Who pays SDLT, the buyer or the seller?

The buyer pays. It is an extra cost of acquiring the land. You add it to the price and other acquisition costs to find the total cost.

Does VAT affect the SDLT calculation?

It can. If VAT is charged on the sale, it forms part of the consideration on which SDLT is charged. Check whether the price in the question includes or excludes VAT.