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Stamp Duty Land Tax (SDLT) is a tax payable when purchasing property or land in England and Northern Ireland. For businesses acquiring commercial premises, understanding how SDLT works is an important part of assessing the total cost of a transaction.
This guide explains how SDLT applies to commercial property purchases in the UK, including the current rates, how the tax is calculated, and the differences between freehold and leasehold transactions. The information below reflects the rules as at January 2026.
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What Counts as Commercial Property?
Commercial property refers to premises used for business or non-residential purposes. Examples include offices, retail units, warehouses, industrial buildings and other business premises.
When purchasing commercial property, SDLT is normally payable based on the purchase price or transfer value of the property.
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Current SDLT Rates for Commercial Property
For commercial property purchases in England and Northern Ireland, SDLT is charged on portions of the purchase price using the following bands:
| Purchase price | SDLT rate |
| Up to £150,000 | 0% |
| £150,001 to £250,000 | 2% |
| Above £250,000 | 5% |
These rates apply to the portion of the price within each band, rather than a single rate applied to the entire purchase price.
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Example of SDLT on a Commercial Property Purchase
If a trading business purchases a commercial property for £275,000 – the SDLT would be calculated as follows:
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0% on the first £150,000 = £0
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2% on the next £100,000 = £2,000
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5% on the remaining £25,000 = £1,250
Total SDLT payable: £3,250
This example illustrates how SDLT is applied progressively across the purchase price bands.
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SDLT on Freehold Commercial Property
For freehold commercial property purchases, SDLT is generally calculated on the total purchase price of the property.
Once the transaction completes, the buyer’s solicitor normally submits the SDLT return to HM Revenue & Customs (HMRC) and arranges payment of the tax on behalf of the buyer.
Even where no SDLT is due, a return may still need to be submitted depending on the circumstances of the transaction.
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SDLT on Leasehold Commercial Property
SDLT can also apply when acquiring a leasehold commercial property.
In these cases, SDLT may be charged on:
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The lease premium paid for the lease, and
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In some situations, the net present value (NPV) of the rent payable over the term of the lease.
The exact SDLT liability will depend on the lease structure, the premium paid and the total rent due over the lease period.
Because leasehold SDLT calculations can be more complex, businesses typically rely on their solicitor or professional adviser to calculate the correct amount payable. Alternatively you can calculator it yourself using the HMRC calculator
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When SDLT Must Be Paid
After completing a commercial property transaction, the SDLT return must normally be submitted to HMRC within 14 days of completion.
The SDLT payment is usually handled by the solicitor managing the transaction, ensuring the return is filed correctly and the tax is paid within the required timeframe.
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Final Thoughts
Stamp Duty Land Tax is an important cost to factor into any commercial property acquisition. Understanding the applicable SDLT bands and how the tax is calculated helps businesses budget accurately and avoid unexpected costs during a transaction.
Because SDLT rules can vary depending on the structure of the purchase, businesses should always seek advice from a qualified legal or tax adviser to ensure the correct treatment for their specific circumstances.
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