SDLT for Limited Companies in 2026/27: The 17% Flat Rate, 5% Surcharge and ATED Explained

This guide explains the key SDLT rules for limited companies in 2026/27. It covers the 17% flat rate under Schedule 4A from 1 April 2025, the 5% surcharge introduced on 31 October 2024, and the Annual Tax on Enveloped Dwellings (ATED) due by 30 April 2027. We include worked examples to help you calculate your liabilities.

This guide is for UK directors of limited companies, buy-to-let landlords using corporate structures, and their accountants. It addresses common confusion about SDLT thresholds, surcharges, and ATED for companies.

What changed since 31 October 2024 and 1 April 2025

The 5% surcharge on additional dwellings increased from 3% to 5% on 31 October 2024. The 17% flat rate for non-natural persons under Schedule 4A came into force on 1 April 2025. Companies buying residential property worth more than £500,000 now pay SDLT at 17% instead of standard bands plus surcharge.

Why the rates went up: the policy story behind the 17% flat rate and 5% surcharge

The Autumn Budget 2024 announcement on 30 October 2024 raised the additional-dwellings surcharge from 3% to 5% effective 31 October 2024. This measure was introduced to support those buying their first home and to dampen investor demand in the residential market. The single rate for non-natural persons under Schedule 4A FA 2003 rose from 15% to 17% from 1 April 2025. This separate measure targeted corporate "enveloping" structures used to shield high-value residential property from higher tax rates. These were the first material SDLT rate changes since the 2022 mini-Budget reversal. The policy shift has had a significant impact on buy-to-let landlords who had moved from personal ownership to limited-company SPVs, driven by the Section 24 phase-out of mortgage-interest relief between 2017 and 2020. These landlords now face a much steeper purchase tax than individuals with multiple properties. HMRC's own impact assessment estimated the 5% surcharge would raise around £400m a year. The policy changes reflect a broader strategy to reduce speculative investment in residential property and ensure that those with the ability to pay contribute more to housing markets.

SDLT rates that apply when a limited company buys residential property

Property Value (£)	SDLT Rate	Notes
0 to £125,000	0%	No surcharge
£125,001 to £250,000	2%	No surcharge
£250,001 to £925,000	5%	No surcharge
£925,001 to £1,500,000	10%	No surcharge
£1,500,001 and above	12%	No surcharge
£40,000 to £500,000	+5% surcharge	Applies to all companies buying above £40,000
Over £500,000	17% flat rate	Under Schedule 4A from 1 April 2025

The Schedule 4A 17% flat rate: when it bites and the reliefs that take you out of it

The 17% flat rate applies to companies buying residential property worth more than £500,000. It replaces the standard SDLT bands and 5% surcharge. However, several reliefs under Schedule 4A can remove the company from this rate.

• Property rental business
• Property developers
• Property traders
• Properties open to the public
• Dwellings for employees
• Farmhouses
• Financial-institution acquisitions in lending

If a relief is claimed and maintained, the standard bands plus 5% surcharge apply instead. If the relief ceases within 3 years, the 17% SDLT is clawed back.

Multiple dwellings, mixed-use and linked transactions: three edge cases that trip up Ltd buyers

Multiple Dwellings Relief (MDR) was abolished from 1 June 2024 for transactions with an effective date on or after that date, so a Ltd buying a portfolio can no longer average the per-dwelling price. Each dwelling now stands alone for SDLT calculation, although the linked-transaction rules still aggregate consideration where appropriate. Mixed-use property (one transaction including residential and non-residential elements) attracts the non-residential SDLT bands, which top out at 5% above £250,000. The 5% additional-dwellings surcharge does NOT apply to non-residential or mixed transactions. HMRC has been challenging "mixed-use" claims aggressively where the non-residential element is trivial. Linked transactions (e.g. a Ltd buying three flats from the same vendor in a coordinated deal) are treated as a single transaction for SDLT purposes. The consideration is aggregated to determine the relevant band, although the 17% Sch 4A test applies on a per-dwelling basis if any single dwelling exceeds £500,000. These edge cases can significantly impact SDLT liabilities and require careful planning to ensure compliance.

Annual Tax on Enveloped Dwellings (ATED) for 2026/27

ATED applies to companies and other non-natural persons holding UK residential property valued over £500,000. The chargeable period is 1 April 2026 to 31 March 2027. The return and payment are due by 30 April 2027.

2026-27 ATED Bands

Property Value (£)	ATED Charge (£)
£500,001 to £1,000,000	£4,600
£1,000,001 to £2,000,000	£9,450
£2,000,001 to £5,000,000	£32,200
£5,000,001 to £10,000,000	£75,450
£10,000,001 to £20,000,000	£151,450
£20,000,000 and above	£303,450

Reliefs include:

• Property-rental business
• Property developers/traders
• Properties open to the public
• Dwellings for employees
• Farmhouses
• Social-housing providers

These reliefs reduce the ATED charge to nil, but the Relief Declaration Return is still required by 30 April.

ATED in practice: valuation dates, partial-period filings and the £40 penalty trap

The current 5-year valuation cycle uses the 1 April 2022 valuation, which governs returns for chargeable periods 1 April 2023 through 31 March 2028. The next revaluation is 1 April 2027 (governing returns from 2028/29 onwards). Companies can apply for a Pre-Return Banding Check (PRBC) if their property valuation is within 10% of a band threshold. HMRC issues a binding response within 30 working days. Partial-period filings: an acquisition mid-period requires a return within 30 days of the chargeable event. The annual charge is apportioned by the number of days the property is held within the chargeable period. Reliefs eliminate the charge but the Relief Declaration Return is STILL due by 30 April. Late or missing returns trigger penalties: £100 immediately, then £10 per day after 3 months, then 5% of the tax due at 6 and 12 months. Late payment carries interest plus 5% of the unpaid tax at 30 days, 6 months and 12 months. Common trap: directors assume "no tax due means no return required". This is wrong and HMRC routinely fines companies that have claimed full relief but missed the filing window. The penalty trap can be particularly harsh for companies that have correctly calculated their liability but failed to file on time.

Worked example 1: a limited company buying a £400,000 buy-to-let

• Standard SDLT bands:
• 0% on £0 to £125,000 = £0
• 2% on £125,001 to £250,000 = £2,500
• 5% on £250,001 to £400,000 = £7,500
• Subtotal = £10,000
• Plus 5% surcharge on the entire £400,000 = £20,000
• Total SDLT = £30,000
• ATED = NIL, because the property value is below the £500,000 threshold

Worked example 2: a limited company buying a £750,000 residential property

Without relief

• 17% flat rate applies (price > £500,000)
• SDLT = 17% × £750,000 = £127,500
• ATED 2026-27 (band £500,001 to £1m): £4,600

With property-rental-business relief

• Standard bands + 5% surcharge apply
• SDLT:
• 0% on £0 to £125,000 = £0
• 2% on £125,001 to £250,000 = £2,500
• 5% on £250,001 to £750,000 = £25,000
• Subtotal = £27,500
• Plus 5% on £750,000 = £37,500
• Total SDLT = £65,000
• Savings vs 17% rate = £62,500
• ATED also relieved (but return still due by 30 April)
• Clawback risk: if property stops being let on commercial terms within 3 years, the relief is withdrawn and the full £62,500 becomes payable.

Free SDLT calculator for limited companies

Try the MBridge SDLT Calculator for Limited Companies →

Three mistakes limited-company buyers make

Mistake 1: Confusing the 5% surcharge with nil-rate bands

The 5% surcharge applies to the entire purchase price for companies buying dwellings worth £40,000 or more. There is no nil-rate band for the surcharge.

Mistake 2: Not understanding the 17% flat rate threshold

The 17% flat rate under Schedule 4A applies to companies buying property worth more than £500,000. It replaces the standard bands and surcharge, not stacks on top.

Mistake 3: Ignoring ATED and its relief mechanisms

Companies with property valued over £500,000 must pay ATED annually. Many overlook the need for relief claims or the 30 April filing deadline.

SDLT for Ltd buyers in Scotland and Wales: LBTT and LTT have different rates

SDLT applies in England and Northern Ireland only. Scotland uses Land and Buildings Transaction Tax (LBTT) administered by Revenue Scotland. The Additional Dwelling Supplement (ADS) sits at 8% (raised from 6% in December 2024). Standard residential LBTT bands top out at 12%. No direct equivalent of the 17% Sch 4A flat rate for companies. Wales uses Land Transaction Tax (LTT) administered by the Welsh Revenue Authority. The higher residential rates for additional dwellings sit at 4% above the standard bands. Standard top rate is 12%. No equivalent of the Sch 4A flat rate. For Ltd companies buying across the UK, this means a £400,000 buy-to-let could attract very different total liability depending on the jurisdiction: roughly £30,000 in England, around £62,000 in Scotland, and around £39,000 in Wales (these are illustrative; verify with the relevant revenue authority's current rates at the time of completion). ATED is a UK-wide annual charge and applies regardless of the devolved property-tax regime where the dwelling sits.

Practical steps for the next twelve months

• Review existing property portfolios for ATED liability.
• Determine if property-rental-business relief applies to current or future purchases.
• File a Relief Declaration Return if claiming ATED reliefs.
• Update accounting systems to track SDLT and ATED due dates.
• Monitor the 3-year clawback window for any claimed Schedule 4A reliefs.
• Consider using a compliance tool like MBridge's SDLT calculator.
• Prepare for the 30 April 2027 filing deadline for ATED returns.

How MBridge helps

MBridge provides tools to simplify SDLT and ATED compliance for SMEs and accountants. Our Stamp Duty Calculator helps estimate SDLT liabilities for limited companies. We also offer Employer National Insurance updates to help with broader tax planning.

HMRC and legislation sources

• Stamp Duty Land Tax for corporate bodies
• Stamp Duty Land Tax residential property rates
• Stamp Duty Land Tax: buying an additional residential property
• Annual Tax on Enveloped Dwellings: the basics
• SDLT manual: SDLT bands and rates
• SDLT manual: Schedule 4A reliefs
• Finance Act 2003, Schedule 4A

This article is general information and does not constitute tax or legal advice. Always check the current HMRC guidance or seek qualified professional advice before acting.