Published: June 2026 | Fact-Checked & Audited By: David Vance, CTA FCA (Chartered Tax Advisor & Accountant)
This guide is fully updated for the 2026/27 HMRC tax year. All calculations and tax rules have been audited against official UK legislation.
When purchasing commercial real estate, agricultural land, or mixed-use properties in the UK, you do not pay standard residential Stamp Duty. Instead, your transaction is subject to non-residential Stamp Duty Land Tax (SDLT). Understanding these rules is essential for businesses, developers, and investors, as non-residential rates are significantly lower than residential rates and completely exempt from additional home surcharges. In this guide, we explain the commercial tax bands, what qualifies as mixed-use, and the rates for the 2026/27 tax year.
What is a Non-Residential Property?
HMRC defines non-residential property as any property that is not used as a dwelling. This includes:
- Commercial buildings, such as shops, offices, factories, warehouses, and offices.
- Agricultural land and forests.
- Mixed-use properties (e.g. a building containing a ground-floor shop with a residential flat above).
- Purchases of 6 or more residential properties in a single transaction (which are legally classified as non-residential for SDLT purposes).
Commercial & Non-Residential SDLT Rates (2026/27)
Unlike residential properties, non-residential acquisitions do not attract any surcharges for second homes or non-UK resident buyers. The tax is calculated using simple sliced bands:
| Property Value Band (Non-Residential) | Stamp Duty (SDLT) Rate |
|---|---|
| £0 to £150,000 | 0% |
| £150,001 to £250,000 | 2% |
| Over £250,000 | 5% |
The Mixed-Use Advantage
If a property contains both residential and non-residential elements, the entire transaction is classified as “mixed-use” and uses the lower non-residential tax rates. For example, if you buy a mixed-use building for **£800,000**:
- As a residential second home: You would pay standard rates + the 5% surcharge, resulting in a tax bill of **£68,750**.
- As a mixed-use property: You pay commercial rates (£0 on the first £150k, 2% on the next £100k, and 5% on the remaining £550k), resulting in a tax bill of **£29,500**—a massive saving of **£39,250**!
To compare residential vs commercial rates and calculate your potential transaction costs, use our Commercial Stamp Duty Calculator.
What People Search For: FAQs on Commercial & Mixed-Use Stamp Duty
1. What are the commercial and non-residential stamp duty rates for 2026/27?
Non-residential transactions pay 0% on the first £150,000, 2% on the portion between £150,001 and £250,000, and 5% on any value over £250,000. These rates apply to commercial buildings, land, and mixed-use purchases.
2. What qualifies as a mixed-use property for stamp duty purposes?
A mixed-use property is one that has both residential and non-residential elements. Examples include a shop with a flat above, a working farm with a farmhouse, or a residential house with a commercial office/surgery inside.
3. How is stamp duty calculated on a new commercial lease?
When you lease a commercial property, you pay SDLT based on the Net Present Value (NPV) of the rent over the lease term. The rates are 0% up to £150,000, 1% on the NPV from £150,001 to £5,000,000, and 2% on the NPV over £5,000,000.
4. Do overseas or non-UK resident buyers pay extra stamp duty on commercial land?
No. The 2% non-UK resident surcharge applies strictly to residential properties. Foreign buyers and overseas entities pay the standard commercial rates when purchasing commercial properties or land.
5. How does the 6-property rule work for commercial stamp duty?
If you purchase six or more residential properties (such as a portfolio or a block of flats) in a single transaction, HMRC allows you to treat the transaction as non-residential. This means you pay commercial rates and avoid the 5% surcharge.
6. Are limited companies subject to a surcharge on commercial property purchases?
No. The 5% surcharge for additional homes only applies to residential properties. Limited companies buying commercial buildings pay the standard commercial rates starting from the £150,000 nil-rate band.
7. Can I pay commercial stamp duty rates if the property has a small home office?
Simply having a room used as a home office does not make a property mixed-use. HMRC looks for a distinct, functional commercial element (like a separate business premise, surgery, or shop) to justify non-residential classification.
8. How is the Net Present Value (NPV) calculated for commercial lease stamp duty?
The NPV is calculated by discounting future lease rents to current values using a statutory discount rate of 3.5%. The resulting sum represents the taxable value of the lease against which SDLT rates are applied.
9. Do commercial stamp duty rates apply to residential land or gardens sold separately?
If you sell the garden or grounds of a residential property separately from the house itself, it is generally still classified as residential property for SDLT purposes unless there is a clear commercial use for the land. However, if the land has no connection to a dwelling, commercial rates may apply.
10. Can a commercial property purchase qualify for first-time buyer stamp duty relief?
No. First-time buyer stamp duty relief applies strictly to residential properties intended to be used as your main residence. Commercial and mixed-use properties cannot qualify for first-time buyer relief under any circumstances.