Stamp duty on commercial property: how much will you pay in 2026?

Stamp duty on commercial property is a tax you pay when you buy a non residential or mixed use property worth more than £150,000 in England or Northern Ireland. It is calculated in bands, so you pay 0% on the first £150,000, 2% on the next £100,000 and 5% on everything above £250,000. This guide covers exactly how much stamp duty you will pay on a commercial property, how leases and VAT affect the bill, what relief is available, when the tax is due and how to fund it alongside your purchase.

What is stamp duty on commercial property?

Stamp Duty Land Tax (SDLT) is the tax the UK government charges on land and property transactions in England and Northern Ireland. It applies to both residential and commercial deals, but commercial property has its own rates and thresholds, which are generally lower than the residential ones.

If you are buying in Scotland, you will pay Land and Buildings Transaction Tax (LBTT) instead. In Wales, it is Land Transaction Tax (LTT). Both work on the same principle as SDLT but use different rates, covered later in this guide.

Do you pay stamp duty on commercial property?

You pay stamp duty on any commercial property purchase in England or Northern Ireland worth more than £150,000. Below that threshold, no tax is due. Above it, the amount rises in stages as the purchase price increases, rather than being charged as one flat rate on the full amount. This applies whether you are buying as a sole trader, a partnership or a limited company, and whether the property is freehold or a long leasehold with a premium attached.

Current stamp duty rates for commercial property

The rates below apply to freehold purchases and lease premiums for non residential and mixed use property in England and Northern Ireland.

Each band is only taxed at its own rate, so the whole purchase price is never taxed at the top rate.

How to calculate stamp duty on a commercial property purchase

To work out your bill, apply each rate to the portion of the price that falls within that band, then add the amounts together.

For example, on a property worth £500,000:

• £150,000 taxed at 0% = £0

• £100,000 (£150,001 to £250,000) taxed at 2% = £2,000

• £250,000 (the remainder above £250,000) taxed at 5% = £12,500

• Total stamp duty payable = £14,500

These figures are a guide. Your solicitor or conveyancer will confirm the exact amount due, and the rate can differ if you are buying through a company or as part of a linked transaction involving multiple properties.

Stamp duty on commercial property leases

If you are taking on a commercial lease rather than buying freehold, stamp duty can apply to two separate elements: any premium paid to secure the lease, and the rent itself.

A lease premium is taxed using the same rates as a freehold purchase, shown in the table above. The rent is taxed differently, based on the net present value (NPV) of the total rent payable over the term of the lease:

• £0 to £150,000 of NPV = 0%

• £150,001 to £5,000,000 of NPV = 1%

• Above £5,000,000 of NPV = 2%

HMRC's stamp duty calculator works out the NPV of your rent and the resulting stamp duty, since the calculation accounts for rent reviews and the length of the lease.

Does VAT affect stamp duty on commercial property?

VAT can increase the amount of stamp duty you pay on a commercial property, because SDLT is calculated on the VAT inclusive price. If the seller has opted to tax the property, VAT at 20% is added to the purchase price, and stamp duty is then worked out on that higher figure, not the net price.

For example, on a £500,000 property where the seller has opted to tax:

• Purchase price = £500,000

• VAT at 20% = £100,000

• Total consideration for stamp duty purposes = £600,000

• Stamp duty payable = £19,500, compared to £14,500 on the same property without VAT

A VAT registered buyer can usually reclaim the VAT itself, but the extra stamp duty this creates cannot be recovered. It is worth checking a property's VAT status with the seller's solicitor before you exchange contracts.

What counts as a commercial property?

A commercial property is generally any non residential property. Common examples include:

• Offices

• Shops and retail units

• Warehouses and industrial units

• Factories

• Agricultural land

• Mixed use buildings, such as a flat above a shop

What doesn't count as a commercial property?

Residential property does not count as commercial property for stamp duty purposes, whether it is a home you live in or a buy to let investment. These fall under the residential SDLT rates and thresholds instead, which are structured differently to the commercial rates in this guide.

Stamp duty relief on commercial property

Certain transactions qualify for relief from stamp duty on commercial property, which can reduce or remove the tax due. Common examples include:

• Transfers between companies in the same group, where both buyer and seller are group members at the effective date of the transaction

• Purchases by charities, provided the property will be used for charitable purposes

• Certain leases, including those with low rents or involving agricultural land

You can check the full list of reliefs and whether your transaction qualifies on the government website.

When do you need to pay stamp duty on commercial property?

Stamp duty is due within 14 days of the effective date of your transaction, which is usually the completion date. Your solicitor or conveyancer will normally file the SDLT return and arrange payment to HMRC on your behalf as part of the conveyancing process.

Interest starts to accrue from day 15 if you miss the deadline, so it is worth confirming with your solicitor exactly when payment will be made, particularly if you are completing on a tight timeline, such as buying at auction.

Can you add stamp duty to a commercial mortgage?

Stamp duty is generally paid upfront at completion alongside your deposit and legal fees, rather than added to your commercial mortgage. Lenders base the mortgage amount on the property's value or purchase price, not your total transaction costs, so you will need funds available to cover stamp duty separately.

When you are budgeting for a purchase, include stamp duty alongside your deposit, valuation and legal fees so there are no surprises at completion. If timing is tight, for example when you need to complete before a mortgage offer comes through, a bridging loan can cover the purchase in the short term while your longer term finance is arranged.

Stamp duty on commercial property in Scotland and Wales

SDLT only applies in England and Northern Ireland. If you are buying commercial property in Scotland, you will pay Land and Buildings Transaction Tax (LBTT) instead, at the following non residential rates:

In Wales, commercial property purchases are taxed under Land Transaction Tax (LTT), which uses its own bands and rates. Check the current thresholds on the Welsh Government website before you budget for a purchase there, since LTT rates differ from both SDLT and LBTT.

Ready to fund your next commercial property purchase?

Once you know how much stamp duty you will pay, the next step is arranging finance for the purchase itself. Capitalise gives you access to a panel of UK lenders, so our funding specialists can match you to a commercial mortgage that fits your deposit, timeline and the type of property you are buying. Apply for commercial mortgage finance with Capitalise and we will help you compare offers from across our lender panel, so you can complete your purchase with the right funding in place.