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| Band | Rate | Tax |
|---|
How stamp duty works on commercial property
Commercial and mixed-use property in England and Northern Ireland pays SDLT at the non-residential rates, charged in slices like residential stamp duty:
| Part of the price | Rate |
|---|---|
| Up to £150,000 | 0% |
| £150,001 to £250,000 | 2% |
| Above £250,000 | 5% |
There is no surcharge for companies, for additional properties or for non-UK resident buyers on non-residential property, which is why semi-commercial and mixed-use deals can carry far less stamp duty than an equivalent residential purchase.
Mixed-use and semi-commercial
A purchase that includes both residential and non-residential elements, such as a shop with a flat above, is taxed entirely at the non-residential rates. The non-residential part has to be genuine: a garden or a small amount of land on its own may not be enough. A purchase of six or more dwellings in one transaction can also be treated as non-residential. For residential company purchases, use the limited company stamp duty calculator.
Stamp duty on a new commercial lease
When a new lease is granted, SDLT can be due on two things: any premium paid, at the same rates as a purchase, and the rent. Tax on the rent is worked out on the net present value of the rent over the term, discounted at 3.5% a year:
| Net present value of the rent | Rate |
|---|---|
| Up to £150,000 | 0% |
| £150,001 to £5,000,000 | 1% |
| Above £5,000,000 | 2% |
Buying an existing lease by assignment is taxed on the price paid, like a purchase.
Why it matters on a commercial mortgage
Stamp duty is part of the cash the borrower needs on day one, alongside the deposit, valuation, legal and lender fees. On a semi-commercial purchase with a 25–30% deposit, getting the SDLT figure right early avoids a funding gap at completion.
Questions brokers ask
What are the stamp duty rates on commercial property?
Non-residential SDLT is 0% on the first £150,000, 2% on the next £100,000 and 5% above £250,000, charged in slices.
Do companies pay a surcharge on commercial stamp duty?
No. The 5% higher rates and the 2% non-resident surcharge only apply to residential property. Commercial and mixed-use purchases pay the standard non-residential rates.
Is a shop with a flat above taxed as commercial?
Usually, yes. A genuine mixed-use purchase, such as a shop with a flat above, is taxed entirely at the non-residential rates.
How is stamp duty worked out on a new commercial lease?
On any premium at the purchase rates, plus 1% of the net present value of the rent above £150,000 (2% above £5 million), discounting the rent at 3.5% a year.
Does this cover Wales or Scotland?
No. Wales has Land Transaction Tax and Scotland has LBTT, with different rates. This calculator covers England and Northern Ireland.
More tools for brokers
Ltd company stamp duty calculator
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One postcode: sold price comps, EPC & MEES, stamp duty, flood warnings, HMO licensing and Article 4, printed as a client-ready deal pack.
Open →Source the case in the same place
DAS Source compares specialist BTL, Ltd Co/SPV, HMO, MUFB, semi-commercial and commercial lenders in seconds. The broker tools come with every plan. £50 a month per firm after a 7-day free trial.
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