Commercial property stamp duty explained
When purchasing commercial premises in England, Wales, Scotland and Northern Ireland, understanding the tax you’ll need to pay on commercial property is crucial for budgeting and compliance.
Always seek advice from a qualified mortgage broker or property tax specialist before proceeding.
What Is Stamp Duty on Commercial Property?
Stamp Duty Land Tax (SDLT) is a tax payable when you buy or lease commercial property or land in England or Northern Ireland. In Wales it’s called Land Transaction Tax (LLM) and it’s called Land an Buildings Transaction Tax in Scotland (LBTT).
This includes office buildings, retail units, warehouses, and other non-residential premises. Whether you're acquiring freehold or leasehold interests, stamp duty on commercial premises can represent a significant cost.
Why is it important to know how stamp duty for commercial properties works?
Knowing how stamp duty on commercial property works helps you:
Budget accurately for acquisitions
Avoid unexpected tax liabilities
Structure deals more efficiently
Comply with HMRC regulations
Whether you're buying or leasing, valuing commercial property correctly and factoring in SDLT is essential. For tailored advice, consult a property tax specialist or solicitor experienced in commercial building valuation and transactions.
If you are buying property using a limited company, there can be a surcharge paid on top of normal Stamp Duty. Always consult government information on any surcharges paid by limited companies.
Current Rates for Commercial Stamp Duty (2025)
Depending on where in the UK you are buying a property, you may have to pay tax. You will be eligible to pay:
Stamp Duty Land Tax in England and Northern Ireland
Land and Buildings Transaction Tax in Scotland
Land Transaction Tax in Wales.
There are different rates applied, depending on the value of the property. These rates apply to the portion of the purchase price within each band.
Stamp Duty Land Tax
The current Stamp Duty Land Tax (SDLT) rates for commercial property purchases in England and Northern Ireland are as follows:
Up to £150,000: 0%
£150,001 to £250,000: 2%
Over £250,000: 5%
Land and Buildings Transaction Tax
In Scotland, you’ll pay Land and Buildings Transaction Tax (LBTT). The rates are:
Up to £150,000: 0%
£150,001 to £250,000: 1%
Over £250,000: 5%
Land Transaction Tax
In Wales, you’ll pay Land Transaction Tax (LTT). The rates are:
Up to £150,000: 0%
£150,001 to £250,000: 1%
£250,001 to £1,000,000: 5%
Over £1,000,000: 6%
Commercial mortgage stamp duty example
You are buying a commercial property in England. If you pay £300,000 for the property, you’ll pay:
0% on the first £150,000
2% on the next £100,000 (£2,000)
5% on the remaining £50,000 (£2,500)
Total SDLT: £4,500
Stamp Duty on Commercial Leases
If you're leasing commercial premises, SDLT may also apply to the net present value (NPV) of the rent. The rates are:
Up to £150,000 NPV: 0%
£150,001 to £5 million NPV: 1%
Over £5 million NPV: 2%
Calculating SDLT on leases can be complex, so professional advice is recommended.
Exemptions and Reliefs
Certain transactions may qualify for reliefs or exemptions, such as:
Transfers between group companies
Property transfers due to divorce or dissolution of a civil partnership
Charitable purchases
Professional advice is recommended if you believe a transaction is exempt from stamp duty.
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