Property Trader Relief Explainer

Property Trader Relief Explainer

This tool helps you understand if your property transaction might qualify for Stamp Duty Land Tax (SDLT) relief under Schedule 6A of the Finance Act 2003. If you qualify, you pay NO stamp duty on the transaction - a potential 100% saving. This is not financial advice.

What is Property Trader Relief? This relief provides a complete exemption from SDLT in qualifying circumstances related to property chain situations and employment relocations.

Note: The results provided are based on the information you provide and are for guidance only. For definitive advice, please consult a tax professional.

Key terms: Property trader, House-building company, New dwelling, Permitted area

SDLT Savings Calculator

Use this calculator to understand how much SDLT you could potentially save if your transaction qualifies for relief:

Your Potential SDLT Savings:

Without relief, you would pay:

With relief, you would pay: £0

Total savings:

1. Which scenario best describes your situation?
Click here for detailed guidance on scenarios

Please select the option that most closely matches your transaction:

  • Property trader buying from personal representatives: Relief for property traders purchasing properties from executors or administrators of a deceased person's estate. The property must have been the deceased's main residence.
  • Property trader buying where a chain has broken down: Relief for property traders who step in to purchase a property when a sale chain collapses, enabling the seller to proceed with their onward purchase.
  • House-builder buying in a part-exchange: Relief for house-building companies that buy a customer's existing property as part of a deal where the customer buys a new-build property from them (often called "part exchange").
  • Property trader buying from someone buying a new home: Relief for property traders who buy a property from someone who is buying a newly built property from a house-builder. Unlike the part-exchange scenario, the trader is a third party facilitating the transactions.
  • Employer buying from relocating employee: Relief for employers who buy properties from their employees who are relocating for work purposes.
  • Property trader buying in employment relocation: Relief for property traders who buy properties from individuals who are relocating for employment reasons. The trader acts instead of the employer.

Important: Each scenario has specific conditions that must be met for the relief to apply. Selecting the wrong scenario may result in incorrect guidance.

Select the option that most closely matches your transaction type. Relief is available only for specific scenarios.
Does the individual intend to occupy the new dwelling as their only or main residence?
Click here for guidance on residency intent
For house-building company relief to apply, the individual must be purchasing a new home to live in. This means:
  • The individual must genuinely intend to use the new property as their main residence
  • They don't need to move in immediately, but the intention must be genuine
  • HMRC may challenge claims where the property is quickly sold or let out
Has the individual occupied the old dwelling as their only or main residence within the last 2 years?
Click here for guidance on previous residence
Relief only applies if the individual has been using the property as their main home recently:
  • The 2-year period ends with the date of acquisition by the house-building company
  • The property must have been their main residence, not just a second home
  • Temporary absences may be acceptable if the property remained their main home
Are the acquisitions (new and old dwellings) entered into in consideration of each other?
Click here for guidance on linked transactions
This means the transactions are linked, like in a part-exchange arrangement:
  • The sale of the old home and purchase of the new one must be connected
  • The transactions are typically dependent on each other
  • Often called a "part-exchange" arrangement
  • The house-building company must be the seller of the new dwelling and the buyer of the old dwelling
What is the area of land being acquired with the old dwelling?
Click here for guidance on permitted area
The "permitted area" is:
  • 0.5 hectares (approximately 1.24 acres or 5,000 square meters) including the house itself, or
  • A larger area if reasonably required for the enjoyment of that specific dwelling given its size and character
If the land exceeds the "permitted area", partial relief may still be available - you would pay SDLT only on the value of the excess land.
Is the acquisition made in the course of a business that includes buying dwellings from individuals who buy new dwellings from house-builders?
Click here for guidance on business requirements
The property trader must regularly engage in this type of business activity:
  • The trader's business must include buying homes from individuals who are buying new homes
  • This should be part of the trader's normal business activities
  • It doesn't need to be their only business activity
  • One-off purchases may not qualify
Has the individual occupied the old dwelling as their only or main residence within the last 2 years?
Click here for guidance on previous residence
This ensures the relief is only available for genuine residential properties:
  • The 2-year period ends with the date of acquisition by the property trader
  • The property must have been their main residence, not just a second home
  • Temporary absences may be acceptable if the property remained their main home
Does the individual intend to occupy the new dwelling as their only or main residence?
Click here for guidance on residency intent
For property trader relief to apply, the individual must be purchasing a new home to live in. This means:
  • The individual must genuinely intend to use the new property as their main residence
  • They don't need to move in immediately, but the intention must be genuine
  • HMRC may challenge claims where the property is quickly sold or let out
Does the property trader intend any of the following?
Click here for guidance on permitted activities
For relief to apply, you must not intend any of these activities:
  • Spend more than the permitted amount on refurbishment: This is £10,000 or 5% of the property's purchase price (whichever is greater), up to a maximum of £20,000
  • Grant a lease or license: You cannot rent out the property
  • Allow occupation by connected persons: The property cannot be used by your staff, directors or their relatives
Understanding "Refurbishment" vs. "Safety Works"

Understanding "Refurbishment" vs. "Safety Works"

Definition of Refurbishment: According to the legislation, "refurbishment" means works that enhance or are intended to enhance the value of the dwelling. Importantly, it does not include:

  • Cleaning the dwelling
  • Works required solely for the purpose of ensuring the dwelling meets minimum safety standards

Permitted Amount Calculation:

  • £10,000, or
  • 5% of the consideration for the acquisition of the dwelling (whichever is greater)
  • Subject to a maximum of £20,000

Examples:

  • If you purchase a property for £250,000, your permitted amount is £12,500 (5% of £250,000)
  • If you purchase a property for £500,000, your permitted amount is capped at £20,000
Key Distinctions between Safety Works and Refurbishment

Safety Works (NOT counted toward permitted amount):

  • Fixing dangerous electrical wiring that doesn't meet safety regulations
  • Repairing leaking roofs causing structural damage
  • Replacing boilers that pose carbon monoxide risks
  • Installing legally required smoke or carbon monoxide alarms
  • Removing hazardous materials (like exposed asbestos or lead paint)
  • Treating severe damp or mold that poses health risks
  • Repairing structurally unsafe stairs, floors or ceilings

Refurbishment (DOES count toward permitted amount):

  • Installing a new kitchen or bathroom for aesthetic improvement
  • Adding or upgrading heating systems for better efficiency (when existing system is safe)
  • Installing new flooring or carpeting for appearance
  • Redecorating rooms or repainting walls for aesthetic purposes
  • Adding additional electrical sockets or lighting features
  • Landscaping gardens or improving external appearance
  • Installing new windows for energy efficiency (when existing ones aren't unsafe)

Important Note: Where there is ambiguity, consider the primary purpose of the work:

  • If the work is primarily required to make the property safe and habitable, it's likely a safety work
  • If the work primarily enhances appearance, efficiency, or marketability, it's likely refurbishment

For a new property trader, it's advisable to keep detailed records of all works, including photos before and after, invoices clearly describing the nature of the work, and professional assessments identifying safety issues where applicable.

See full legislation details below for more information.

What is the area of land being acquired with the old dwelling?
Click here for guidance on permitted area
The "permitted area" is:
  • 0.5 hectares (approximately 1.24 acres or 5,000 square meters) including the house itself, or
  • A larger area if reasonably required for the enjoyment of that specific dwelling given its size and character
If the land exceeds the "permitted area", partial relief may still be available - you would pay SDLT only on the value of the excess land.
Is the acquisition made in the course of a business that consists of or includes acquiring dwellings from personal representatives of deceased individuals?
Click here for guidance on the business requirement
The legislation requires that your business "consists of or includes" acquiring properties from estates (see paragraph 3(2)(a) below). This means:
  • Your business must regularly deal with properties from estates
  • This should be part of your normal business activities
  • It doesn't need to be your only business activity
  • One-off purchases will not qualify
Important note about new businesses: Every property trader has to start somewhere. If this is your first such transaction, you could still qualify if:
  • Your business is properly set up with the intention of regularly dealing with such properties
  • Your business plan and marketing materials clearly state this as a business activity
  • You can demonstrate genuine intention to continue with this type of business
If HMRC challenges your claim on the basis this is your first such transaction, a reasonable argument is that every business must necessarily have a first transaction in its intended field of operation.
Did the deceased individual occupy the dwelling as their only or main residence at some time in the period of two years ending with the date of their death?
Click here for guidance on residence requirements
This condition ensures relief only applies to genuine residential properties (see paragraph 3(2)(b) below):
  • The deceased must have lived in the property as their main home
  • This must have been within the two years before they died
  • It doesn't matter if the property was vacant or let out after their death
Does the property trader intend any of the following?
Click here for guidance on permitted activities
For relief to apply, you must not intend any of these activities (see paragraph 3(2)(c) below):
  • Spend more than the permitted amount on refurbishment: This is £10,000 or 5% of the property's purchase price (whichever is greater), up to a maximum of £20,000 (see paragraph 7(4)-(7) below)
  • Grant a lease or license: You cannot rent out the property
  • Allow occupation by connected persons: The property cannot be used by your staff, directors or their relatives
Understanding "Refurbishment" vs. "Safety Works"

Understanding "Refurbishment" vs. "Safety Works"

Definition of Refurbishment: According to the legislation, "refurbishment" means works that enhance or are intended to enhance the value of the dwelling. Importantly, it does not include:

  • Cleaning the dwelling
  • Works required solely for the purpose of ensuring the dwelling meets minimum safety standards

Permitted Amount Calculation:

  • £10,000, or
  • 5% of the consideration for the acquisition of the dwelling (whichever is greater)
  • Subject to a maximum of £20,000

Examples:

  • If you purchase a property for £250,000, your permitted amount is £12,500 (5% of £250,000)
  • If you purchase a property for £500,000, your permitted amount is capped at £20,000
Key Distinctions between Safety Works and Refurbishment

Safety Works (NOT counted toward permitted amount):

  • Fixing dangerous electrical wiring that doesn't meet safety regulations
  • Repairing leaking roofs causing structural damage
  • Replacing boilers that pose carbon monoxide risks
  • Installing legally required smoke or carbon monoxide alarms
  • Removing hazardous materials (like exposed asbestos or lead paint)
  • Treating severe damp or mold that poses health risks
  • Repairing structurally unsafe stairs, floors or ceilings

Refurbishment (DOES count toward permitted amount):

  • Installing a new kitchen or bathroom for aesthetic improvement
  • Adding or upgrading heating systems for better efficiency (when existing system is safe)
  • Installing new flooring or carpeting for appearance
  • Redecorating rooms or repainting walls for aesthetic purposes
  • Adding additional electrical sockets or lighting features
  • Landscaping gardens or improving external appearance
  • Installing new windows for energy efficiency (when existing ones aren't unsafe)

Important Note: Where there is ambiguity, consider the primary purpose of the work:

  • If the work is primarily required to make the property safe and habitable, it's likely a safety work
  • If the work primarily enhances appearance, efficiency, or marketability, it's likely refurbishment

For a new property trader, it's advisable to keep detailed records of all works, including photos before and after, invoices clearly describing the nature of the work, and professional assessments identifying safety issues where applicable.

See full legislation details below for more information.

What is the area of land being acquired with the dwelling?
Click here for guidance on permitted area
The "permitted area" is:
  • 0.5 hectares (approximately 1.24 acres or 5,000 square meters) including the house itself, or
  • A larger area if reasonably required for the enjoyment of that specific dwelling given its size and character
If the land exceeds the "permitted area", partial relief may still be available - you would pay SDLT only on the value of the excess land.
Is the acquisition made in the course of a business that consists of or includes acquiring dwellings from individuals where a property chain has broken down?
Click here for guidance on business requirements for broken chain relief
The legislation requires that your business "consists of or includes" acquiring properties in broken chain scenarios (see paragraph 4(2)(a) below). This means:
  • Your business must regularly deal with broken chain situations
  • This should be part of your normal business activities
  • It doesn't need to be your only business activity
  • One-off chain rescue purchases will not qualify
Important note about new businesses: Every property trader has to start somewhere. If this is your first broken chain transaction, you could still qualify if:
  • Your business is properly set up with the intention of regularly dealing with chain breakdowns
  • Your business plan and marketing materials clearly state this as a business activity
  • You can demonstrate genuine intention to continue with this type of business
  • You actively market yourself to estate agents, solicitors, and others as providing this service
What constitutes a "broken chain"?
  • The individual had a confirmed buyer for their property who pulled out
  • The individual's purchase was dependent on selling their current property
  • Without intervention, the individual would lose their onward purchase
  • The chain breakdown was not orchestrated or artificial
If HMRC challenges your claim on the basis this is your first such transaction, a reasonable argument is that every business must necessarily have a first transaction in its intended field of operation.
The property trader's business must include buying properties in broken chain scenarios, but this doesn't need to be their sole or primary business activity.
Was the acquisition made for the purpose of enabling the individual's acquisition of the second dwelling to proceed?
Click here for guidance on the purpose requirement
This condition ensures the relief only applies where the property trader is genuinely facilitating a rescue (see paragraph 4(1)(c) below):
  • The trader must be stepping in specifically to save the individual's onward purchase
  • There should be evidence that the individual's second property purchase was at risk
  • The timing should demonstrate urgency - the intervention prevents loss of the second property
  • The trader is not just taking advantage of a distressed sale
Evidence that supports this purpose:
  • Correspondence showing the individual's onward purchase was threatened
  • Letters from estate agents or solicitors confirming the chain breakdown
  • Completion dates that demonstrate the time-critical nature
  • Exchange contracts on the second property that would be lost without intervention
What is NOT sufficient:
  • Buying simply because the individual wants to move
  • Purchasing where there was never a second property lined up
  • Acquiring properties where the "chain breakdown" was contrived
  • Transactions where the primary motive is commercial gain rather than chain rescue
The property trader must be stepping in to rescue a broken chain.
Has the individual occupied the old dwelling as their only or main residence within the last 2 years?
Click here for guidance on residence requirements
This condition ensures relief only applies to genuine residential properties (see paragraph 4(2)(b)(i) below):
  • The individual must have lived in the property as their main home
  • This must have been within the two years before the property trader acquired it
  • Temporary absences may be acceptable if the property remained their main home
  • The property must have been their primary residence, not a second home or investment
What counts as "main residence":
  • Where the individual spent most of their time
  • Where their belongings and personal effects were kept
  • The address used for correspondence, voting, and official purposes
  • Where family members lived (if applicable)
Temporary absences that may be acceptable:
  • Work-related travel or secondments
  • Extended holidays or temporary care situations
  • Brief periods of rental while deciding whether to sell
What would NOT qualify:
  • Buy-to-let investment properties
  • Second homes or holiday homes
  • Properties that were never occupied as the main residence
  • Properties abandoned for more than two years
This ensures the relief is only available for genuine residential properties.
Does the individual intend to occupy the second dwelling as their only or main residence?
Click here for guidance on future residence intentions
For broken chain relief to apply, the individual must be genuinely moving to a new main home (see paragraph 4(2)(b)(ii) below):
  • The individual must genuinely intend to use the second property as their main residence
  • They don't need to move in immediately, but the intention must be genuine
  • HMRC may challenge claims where the property is quickly sold or let out
  • The intention should be supported by actions and circumstances
Evidence supporting genuine intention:
  • The size and location of the second property is suitable for the individual's needs
  • The individual is arranging mortgage finance for residential purposes
  • Moving arrangements and address changes are being organized
  • The property price and type suggests residential rather than investment use
Warning signs that HMRC might challenge:
  • The second property is immediately let out or resold
  • The individual never actually moves in
  • The property is clearly unsuitable for the individual's residential needs
  • Evidence suggests the transaction was commercially motivated
Note: Circumstances can change after acquisition, but the intention must be genuine at the time of the chain rescue transaction.
For relief to apply, the individual must be acquiring a new home to live in.
Does the property trader intend any of the following?
Click here for guidance on permitted activities and restrictions
For relief to apply, you must not intend any of these activities (see paragraph 4(2)(c) below):
  • Spend more than the permitted amount on refurbishment: This is £10,000 or 5% of the property's purchase price (whichever is greater), up to a maximum of £20,000
  • Grant a lease or license (except to the individual for up to 6 months): You cannot rent out the property, but there's an exception for short-term letting back to the seller
  • Allow occupation by connected persons: The property cannot be used by your staff, directors or their relatives
Understanding "Refurbishment" vs. "Safety Works"

Understanding "Refurbishment" vs. "Safety Works"

Definition of Refurbishment: According to the legislation, "refurbishment" means works that enhance or are intended to enhance the value of the dwelling. Importantly, it does not include:

  • Cleaning the dwelling
  • Works required solely for the purpose of ensuring the dwelling meets minimum safety standards

Permitted Amount Calculation:

  • £10,000, or
  • 5% of the consideration for the acquisition of the dwelling (whichever is greater)
  • Subject to a maximum of £20,000
Key Distinctions between Safety Works and Refurbishment

Safety Works (NOT counted toward permitted amount):

  • Fixing dangerous electrical wiring that doesn't meet safety regulations
  • Repairing leaking roofs causing structural damage
  • Replacing boilers that pose carbon monoxide risks
  • Installing legally required smoke or carbon monoxide alarms
  • Removing hazardous materials (like exposed asbestos or lead paint)
  • Treating severe damp or mold that poses health risks
  • Repairing structurally unsafe stairs, floors or ceilings

Refurbishment (DOES count toward permitted amount):

  • Installing a new kitchen or bathroom for aesthetic improvement
  • Adding or upgrading heating systems for better efficiency (when existing system is safe)
  • Installing new flooring or carpeting for appearance
  • Redecorating rooms or repainting walls for aesthetic purposes
  • Adding additional electrical sockets or lighting features
  • Landscaping gardens or improving external appearance
  • Installing new windows for energy efficiency (when existing ones aren't unsafe)

Special Exception for Broken Chain Relief: Under paragraph 4(2)(c)(ii), property traders are permitted to grant a lease or license back to the individual for up to 6 months. This allows the seller to remain in the property temporarily while completing their onward purchase.

Important Note: Where there is ambiguity, consider the primary purpose of the work. Keep detailed records of all works with professional assessments where applicable.

See full legislation details below for more information.

If any of the first three options apply, the relief will not be available.
What is the area of land being acquired with the old dwelling?
Click here for guidance on permitted area
The "permitted area" is defined in paragraph 7(3) of Schedule 6A (see below):
  • Standard limit: 0.5 hectares (approximately 1.24 acres or 5,000 square meters) including the house itself
  • Extended limit: A larger area if reasonably required for the enjoyment of that specific dwelling given its size and character
What is "reasonably required for enjoyment"?
  • Depends on the size, type and character of the dwelling
  • A large country house may reasonably require more land than a small cottage
  • Consider the local context and what would be normal for that type of property
  • Functional requirements (access, parking, essential outbuildings) vs. purely ornamental land
Examples of reasonable extensions beyond 0.5 hectares:
  • Large detached houses in rural areas where larger plots are normal
  • Properties requiring longer driveways due to their location
  • Dwellings with essential outbuildings or functional agricultural buildings
  • Properties where the land is integral to the character (e.g., historic houses with designed landscapes)
Partial Relief: If the land exceeds the "permitted area", relief is still available for the dwelling and permitted area - you would only pay SDLT on the value attributable to the excess land. Valuation Considerations: Where partial relief applies, you'll need to apportion the purchase price between the dwelling/permitted area and the excess land. Professional valuation advice is recommended.
If the land exceeds the "permitted area", partial relief may still be available.
Has the individual occupied the dwelling as their only or main residence within the last 2 years?
Click here for guidance on residence requirements
This ensures the relief is only available for genuine residential properties:
  • The 2-year period ends with the date of acquisition by the employer
  • The property must have been their main residence, not just a second home
  • Temporary absences may be acceptable if the property remained their main home
Is the acquisition made in connection with a change of residence by the individual resulting from relocation of employment?
Click here for guidance on employment relocation
The property must be acquired as part of the employee's relocation package:
  • The relocation must be for work purposes
  • This could be joining the company, changing role, or changing place of work
  • The purchase must be directly connected to the employment change
  • Typically part of a formal relocation arrangement
Is the change of residence within reasonable daily traveling distance of the new place of employment?
Click here for guidance on commuting distance
This ensures the employee can reasonably commute to their new job location:
  • The new home should be close enough to the new workplace to avoid excessive commuting
  • "Reasonable daily traveling distance" is not defined in law but typically means a normal commuting time
  • What's reasonable may depend on location, transport links, and industry norms
  • In urban areas, this might be 1-2 hours each way; in rural areas, possibly less
Was the former residence within reasonable daily traveling distance of the new place of employment?
Click here for guidance on previous residence location
This helps determine the reasonableness of the relocation distance:
  • If the old home was already within commuting distance, the relocation may not be necessary
  • For relief to apply, the move should generally be necessary due to the job change
  • This question tests whether the employee needed to move or chose to move
  • If the old residence was already convenient, relief may not be appropriate
Does the consideration for the acquisition exceed the market value of the dwelling?
Click here for guidance on property valuation
This ensures the acquisition is not overvalued for the purpose of SDLT relief:
  • The employer should pay no more than market value for the property
  • This prevents artificially high prices being paid to benefit the employee
  • Market value should be determined by a professional valuation
  • If paying above market value, the excess may be treated as earnings for the employee
What is the area of land being acquired with the dwelling? ?
The "permitted area" is generally 0.5 hectares including the house itself, unless a larger area is reasonably required for the enjoyment of the dwelling.
If the land exceeds the "permitted area", partial relief may still be available.
Is the acquisition made in the course of a business that includes acquiring dwellings from individuals in connection with relocation of employment?
Click here for guidance on business requirements for relocation relief
The legislation requires that your business "consists of or includes" acquiring properties in connection with employment relocations (see paragraph 6(2)(a) below). This means:
  • Your business must regularly deal with employment relocation situations
  • This should be part of your normal business activities
  • It doesn't need to be your only business activity
  • One-off relocation purchases will not qualify
  • You should actively market this service to employers, relocation companies, and HR departments
Important note about new businesses: Every property trader has to start somewhere. If this is your first relocation transaction, you could still qualify if:
  • Your business is properly set up with the intention of regularly dealing with employment relocations
  • Your business plan and marketing materials clearly state this as a business activity
  • You can demonstrate genuine intention to continue with this type of business
  • You have relationships or agreements with employers, relocation specialists, or HR companies
What constitutes "employment relocation"?
  • The individual is moving for work-related reasons (new job, transfer, promotion)
  • The relocation is necessary due to the distance to the new workplace
  • The move is typically part of a formal relocation package or arrangement
  • The timing aligns with the employment change
Types of relocation scenarios that may qualify:
  • Corporate transfers and relocations
  • Graduate recruitment where relocation is required
  • Senior executive appointments requiring relocation
  • Military or public sector relocations
  • International assignees returning to the UK
If HMRC challenges your claim on the basis this is your first such transaction, a reasonable argument is that every business must necessarily have a first transaction in its intended field of operation.
The property trader must be in the business of facilitating employment relocations, not just occasional purchases.
Has the individual occupied the dwelling as their only or main residence within the last 2 years?
Click here for guidance on the main residence requirement
The dwelling must have been the individual's "only or main residence" at some point within the 2 years preceding acquisition by the property trader (see paragraph 6(2)(b) below). Key points: What constitutes "only or main residence"?
  • The property where the individual actually lived for the majority of their time
  • Where they slept most nights and kept their main possessions
  • The address used for electoral roll, council tax, and official correspondence
  • It doesn't need to be their only property, but must be their primary home
The 2-year rule:
  • The 2-year period ends on the date you acquire the property
  • The individual must have lived there as main residence at some point during those 2 years
  • They don't need to have lived there for the entire 2 years
  • They don't need to be living there at the time of sale
  • Short periods away (holidays, business trips) don't break occupation
Common scenarios that qualify:
  • Individual lived there until recently but moved out due to job relocation
  • Property was main residence but individual moved to temporary accommodation
  • Individual inherited property and lived there for part of the 2-year period
  • Recent purchase where individual lived there before deciding to relocate
Evidence of main residence:
  • Council tax records showing the property as main residence
  • Electoral roll registration
  • Utility bills in the individual's name
  • Bank statements showing the address
  • HMRC correspondence to that address
What doesn't qualify:
  • Buy-to-let properties that were never the individual's home
  • Holiday homes or second properties
  • Investment properties purchased for speculation
  • Properties where individual never actually lived
Note: The residence test ensures relief is only available for genuine homes, not investment properties.
This ensures the relief is only available for genuine residential properties that were actually lived in.
Is the acquisition made in connection with a change of residence by the individual resulting from relocation of employment?
Click here for guidance on connection with employment relocation
The acquisition must be directly connected to the individual's change of residence due to employment relocation (see paragraph 6(2)(c) below). This requires: What constitutes "relocation of employment"?
  • Starting a new job that requires a move
  • Transfer to a different office or location by the same employer
  • Promotion requiring relocation
  • Job role expansion requiring presence at a different location
  • Secondment or assignment to a new location
Connection between acquisition and relocation:
  • The property purchase must be part of the relocation process
  • The individual is selling because they need to move for work
  • The timing should align with the employment change
  • The relocation should be the driving factor behind the sale
Evidence of connection:
  • Letter from employer confirming relocation requirement
  • Employment contract showing new work location
  • Formal relocation package documentation
  • HR correspondence about the move
  • Removal company quotes for the relocation
Timing considerations:
  • The employment change should precede or coincide with the property sale
  • Reasonable time gap between job change and property sale is acceptable
  • Emergency or urgent relocations qualify (e.g., immediate start dates)
  • Delayed sales due to market conditions don't break the connection
Types of employment relocation that qualify:
  • Corporate relocations and transfers
  • Military postings and deployments
  • Public sector relocations
  • International assignments (both to/from UK)
  • Graduate scheme relocations
  • Emergency service transfers
What doesn't qualify:
  • Voluntary moves unrelated to employment
  • Speculative property sales
  • Lifestyle changes not connected to work
  • Investment property disposals
  • Moves driven by personal preference rather than employment necessity
The key test is whether the property sale is genuinely necessitated by the employment relocation.
The property must be acquired as part of the individual's employment-related relocation process.
Is the change of residence within reasonable daily traveling distance of the new place of employment?
Click here for guidance on reasonable daily traveling distance (new residence)
The new residence must be within "reasonable daily travelling distance" of the new workplace (see paragraph 6(2)(d) below). This ensures the relocation is genuinely necessary and practical. What is "reasonable daily travelling distance"?
  • There's no fixed distance or time limit in the legislation
  • It depends on the individual circumstances and local standards
  • Generally, a commute of 1-2 hours each way might be considered reasonable
  • Consider the mode of transport available (car, public transport)
  • Account for local traffic patterns and transport infrastructure
Factors to consider:
  • Journey time: Door-to-door travel time during peak hours
  • Transport options: Availability of reliable public transport
  • Cost: Reasonable commuting costs relative to salary
  • Frequency: How often the individual needs to be physically present
  • Flexibility: Options for remote work or flexible hours
  • Local norms: What's considered normal in that area
Regional variations:
  • London/South East: Longer commutes are more common and accepted
  • Rural areas: Limited transport options may justify longer distances
  • City centers: Shorter distances expected due to good transport links
  • Industrial areas: Consider shift patterns and transport availability
Practical examples:
  • 30 minutes by car or train - almost certainly reasonable
  • 1 hour by car with good road links - likely reasonable
  • 1.5 hours by public transport with direct links - probably reasonable
  • 2+ hours each way with multiple changes - questionable
Evidence to support reasonableness:
  • Journey planner results showing realistic travel times
  • Local area commuting surveys or statistics
  • Employer policies on reasonable commuting distance
  • Comparable employee commuting patterns
  • Transport cost analysis
The test is objective - would a reasonable person consider this distance practical for daily commuting?
This ensures the new residence allows practical daily commuting to the new workplace.
Was the former residence within reasonable daily traveling distance of the new place of employment?
Click here for guidance on reasonable daily traveling distance (old residence)
This question determines whether the individual's old residence was already within reasonable commuting distance of their new workplace (see paragraph 6(2)(d) below). This is crucial for establishing the necessity of the relocation. Why this matters:
  • If the old residence was already within reasonable distance, the relocation may not be necessary
  • The relief is designed for situations where relocation is genuinely required
  • If someone could reasonably commute from their existing home, why do they need to move?
  • This prevents abuse where unnecessary moves are claimed as employment relocations
When the old residence IS within reasonable distance:
  • Relief may not be available as the move wasn't necessary
  • Consider if there are other compelling reasons for the move
  • Employer requirements or policies may still justify the relocation
  • Changed personal circumstances might make the commute impractical
When the old residence is NOT within reasonable distance:
  • This supports the case that relocation was necessary
  • Shows the move was driven by practical employment needs
  • Demonstrates genuine connection between job change and house move
Special circumstances to consider:
  • Changed work patterns: New role requires different hours or attendance
  • Family circumstances: Children's schooling, spouse's employment
  • Health considerations: Commuting becoming impractical due to health
  • Transport changes: Routes or services no longer available
  • Employer requirements: Company policy requiring local residence
Examples where relief might still apply despite reasonable distance:
  • Employer specifically requires employees to live locally
  • Job involves emergency call-outs requiring quick attendance
  • Role change significantly alters work patterns or requirements
  • Family circumstances make the commute impractical
Use the same criteria as for the new residence to assess what constitutes "reasonable" distance.
Helps establish whether the relocation was genuinely necessary for the employment change.
Does the consideration for the acquisition exceed the market value of the dwelling?
Click here for guidance on consideration vs market value
The consideration (purchase price) must not exceed the market value of the dwelling (see paragraph 6(2)(e) below). This prevents artificial inflation of purchase prices to claim relief. What is "consideration"?
  • The total amount paid by the property trader for the property
  • Includes cash payments, debt assumption, and other valuable consideration
  • May include additional payments for chattels or extras
  • Should exclude separate payments for unrelated services
What is "market value"?
  • The price the property would achieve in an open market transaction
  • Between a willing buyer and willing seller
  • With both parties acting knowledgeably and without compulsion
  • At the time of the actual transaction
Why this restriction exists:
  • Prevents artificial arrangements to claim relief
  • Ensures genuine commercial transactions
  • Stops inflated prices being used to maximize relief claims
  • Maintains integrity of the relief provisions
Acceptable reasons for paying market value or less:
  • Quick sale discount for urgent relocation
  • Property condition requiring renovation
  • Market conditions at time of sale
  • Limited marketing time due to relocation urgency
  • Property trader's professional valuation and risk assessment
Evidence of market value:
  • Professional RICS valuation at time of purchase
  • Recent sales of comparable properties in the area
  • Estate agent valuations or marketing particulars
  • Online property valuation tools (for supporting evidence)
  • Local property market data and indices
What might indicate excessive consideration:
  • Price significantly above recent comparable sales
  • No apparent justification for premium pricing
  • Unusual payment arrangements or additional consideration
  • Connected party transactions at inflated values
Property trader perspective:
  • Property traders typically pay below market value to account for profit margin
  • Quick sale circumstances often justify discounted pricing
  • Risk of renovation, holding costs, and market changes affects pricing
  • Professional property traders have commercial justifications for their pricing
HMRC's approach:
  • HMRC may challenge transactions where consideration appears excessive
  • Burden of proof is on the taxpayer to justify the price paid
  • Professional valuations provide strong supporting evidence
  • Commercial rationale should be clearly documented
Most genuine property trader transactions will satisfy this test as traders typically pay below market value.
Ensures the acquisition price is commercially justified and not artificially inflated.
Does the property trader intend any of the following?
Click here for guidance on permitted activities
The property trader must not intend to carry out certain prohibited activities (see paragraph 6(3) below). These restrictions ensure the relief is only available for genuine quick-sale scenarios. 1. Excessive refurbishment (above permitted amount):
  • Permitted amount: £10,000 or 5% of purchase price (whichever is greater), up to £20,000 maximum
  • What counts as refurbishment: Works that enhance or are intended to enhance the dwelling's value
  • What doesn't count: Basic cleaning, essential safety repairs, maintenance to existing standards
  • Examples of refurbishment: New kitchen, bathroom upgrades, extensions, loft conversions
  • Planning consideration: Factor in all intended works from the outset
2. Granting leases or licenses (except limited exceptions):
  • Prohibited: Letting the property to tenants, granting commercial leases
  • Permitted exception: Allowing the original seller to remain for up to 6 months
  • Rationale: Prevents property traders becoming landlords while claiming relief
  • Temporary arrangements: Very short-term arrangements may be acceptable
3. Occupation by connected persons:
  • Prohibited: Director, employee, or their family members living in the property
  • Connected persons include: Spouses, relatives, business partners, company officers
  • Purpose: Prevents personal use while claiming commercial relief
  • Inspection visits: Brief visits for business purposes are acceptable
Why these restrictions exist:
  • Relief is for genuine commercial property trading, not development
  • Prevents abuse where traders claim relief but then develop or let properties
  • Ensures quick onward sale rather than long-term holding
  • Maintains distinction between trading and investment activities
Practical implications:
  • Plan your activities carefully before claiming relief
  • Document your genuine business intentions
  • Keep refurbishment costs within permitted limits
  • Avoid any arrangements that could be seen as investment activity
Planning your refurbishment budget:
  • Calculate 5% of purchase price
  • Compare with £10,000 minimum
  • Cap at £20,000 maximum
  • Include all enhancement works in your calculation
  • Keep detailed records of all expenditure
Answer "None of the above" only if you genuinely don't intend any of these prohibited activities.
If any of the first three options apply, the relief will not be available.
What is the area of land being acquired with the dwelling?
Click here for guidance on permitted land area
The "permitted area" is generally 0.5 hectares (about 1.25 acres) including the house itself (see paragraph 6(4) below). Land exceeding this may still qualify if it's reasonable for the dwelling's enjoyment. Understanding the 0.5 hectare rule:
  • 0.5 hectares = 5,000 square meters = 1.235 acres
  • This includes the house footprint and all surrounding land
  • Measure the total area of the title, not just the garden
  • Land within this limit automatically qualifies for relief
When larger areas may still qualify:
  • The additional land is "required for the reasonable enjoyment of the dwelling"
  • Consider the character and location of the property
  • Rural properties often have larger reasonable requirements
  • Historic or character properties may need larger grounds
Factors supporting larger areas:
  • Property type: Country houses, farms, manor houses
  • Location: Rural areas where large plots are normal
  • Character: Properties designed for larger grounds
  • Practical needs: Private access roads, parking areas
  • Legal requirements: Planning restrictions requiring certain land areas
What doesn't qualify as "reasonable":
  • Commercial agricultural land
  • Development land separate from the dwelling
  • Investment land holdings
  • Land that could be separately developed
  • Excessive areas disproportionate to the dwelling
Partial relief for excessive land:
  • If land area is excessive, relief may still apply to part of the purchase
  • Relief applies to the dwelling plus reasonable land area
  • The excess land is treated as a separate transaction
  • Apportionment of purchase price may be required
How to measure your land:
  • Check the title register for the exact area
  • Use land registry plans and measurements
  • Professional surveyor measurement if unclear
  • Include all land within the title boundaries
Examples of reasonable larger areas:
  • 1 hectare for a substantial country house
  • 2-3 hectares for a small country estate
  • Larger areas for unique heritage properties
  • Areas dictated by natural boundaries or planning constraints
HMRC's approach:
  • HMRC may challenge excessive land claims
  • Professional valuation may be needed for apportionment
  • Consider the dwelling-to-land value ratio
  • Document why larger areas are reasonable for this specific property
When in doubt, consider whether a typical buyer would expect this amount of land with this type of dwelling.
If the land exceeds the "permitted area", partial relief may still be available for the reasonable portion.

Need More Help?

If you have questions about property trader relief or would like professional assistance with your transaction, please get in touch:

Phone Consultation

For urgent queries or to speak with Land tax expert Nick Garner: 0204 577 3323

Available Monday-Friday, 9am-5pm

Email Enquiries

Send me your questions at: [email protected]

I aim to respond within 1 business day.

Guidance for Property Traders

What is a "permitted amount" for refurbishment? The permitted amount is £10,000 or 5% of the property's purchase price (whichever is greater), up to a maximum of £20,000. See Schedule 6A, paragraph 7(4)-(7) below

What counts as "refurbishment"? Refurbishment means works that enhance or are intended to enhance the value of the dwelling. It does not include basic cleaning or works required solely to meet minimum safety standards. See Schedule 6A, paragraph 7(8) below

What is a "property trader"? A company, limited liability partnership, or partnership whose members are all either companies or LLPs, that carries on the business of buying and selling dwellings. See Schedule 6A, paragraph 7(9) below

What is the "permitted area"? Land up to 0.5 hectares (approximately 1.24 acres or 5,000 square meters) including the house itself, or a larger area if reasonably required for the enjoyment of that specific dwelling given its size and character. See Schedule 6A, paragraph 7(3) below

When can relief be withdrawn? Relief can be withdrawn if the property trader later breaches the conditions, for example by spending more than the permitted amount on refurbishment or allowing employees to occupy the property. See conditions in paragraphs 2(2)(d), 3(2)(c), 4(2)(c), and 6(2)(e) below

HMRC Enquiries and Property Trader Relief

Stamp Duty Land Tax (SDLT) relief under Schedule 6A of the Finance Act 2003 offers exemptions for certain acquisitions by property traders. However, like any form of tax relief, it is subject to scrutiny by HM Revenue and Customs (HMRC). Understanding the enquiry and assessment powers of HMRC is essential for any trader relying on this relief.

1. The Standard Enquiry Window

Where a trader claims Property Trader Relief on an SDLT return, HMRC has nine months from the effective date of the transaction to open an enquiry under paragraph 12 of Schedule 10 to the Finance Act 2003. This nine-month period is the standard statutory window during which HMRC may raise questions, request documents, or investigate whether the relief was properly claimed.

If no enquiry is opened within this period, the return is generally treated as final, subject to the exception of discovery assessments (explained below).

2. Discovery Assessments: Beyond the Nine-Month Period

Even after the nine-month enquiry window closes, HMRC may still raise a discovery assessment under paragraph 25 of Schedule 10, if they find that too little tax has been paid due to:

  • Carelessness, or
  • Deliberate behaviour (i.e. fraud or dishonesty)

This means if a trader has claimed the relief but failed to meet the statutory conditions—such as by exceeding the permitted refurbishment budget, letting out the property, or occupying it personally—and attempted to conceal that fact, HMRC may assess the tax retrospectively. Discovery assessments can reach back up to:

  • 4 years for standard errors,
  • 6 years for careless errors, and
  • 20 years for deliberate misstatements or fraud.

These powers are especially relevant where HMRC believes that the relief was wrongly claimed and the trader did not disclose all relevant information.

3. Withdrawal of Relief

Under paragraph 11 of Schedule 6A, relief is withdrawn automatically if the trader breaches certain post-acquisition conditions, including:

  • Spending more than the permitted amount on refurbishment (generally capped at £20,000),
  • Letting or licensing the property (except short-term back-to-back lets to the seller),
  • Occupation by directors, employees, or connected persons.

Where relief is withdrawn, SDLT becomes chargeable as if no relief had ever been claimed, and interest and penalties may apply.

4. Risk and Compliance Implications

Property traders claiming relief should retain records showing:

  • The intention and conduct at the time of acquisition,
  • Post-acquisition use and expenditure,
  • All communications and contracts with vendors.

In the event of an enquiry or a discovery assessment, these records will form the basis of the defence. Traders are strongly advised to act transparently and ensure full compliance with the conditions of relief.

Schedule 6A, Finance Act 2003: Relief for certain acquisitions of residential property

This is an extract of the legislation for reference purposes. Always refer to the official legislation for the most up-to-date and complete version.

Paragraph 1: Acquisition by house-building company from individual acquiring new dwelling

1(1) Where a dwelling ("the old dwelling") is acquired by a house-building company from an individual (whether alone or with other individuals), the acquisition is exempt from charge if the following conditions are met.

1(2) The conditions are— (a) that the individual (whether alone or with other individuals) acquires from the house-building company a new dwelling, (b) that the individual— (i) occupied the old dwelling as his only or main residence at some time in the period of two years ending with the date of its acquisition, and (ii) intends to occupy the new dwelling as his only or main residence, (c) that each acquisition is entered into in consideration of the other, and (d) that the area of land acquired by the house-building company does not exceed the permitted area.

Plain English Explanation

A house-building company doesn't have to pay SDLT when buying a property from an individual if:

  • The individual is buying a new dwelling from the same company
  • The individual lived in the old property as their main home within the last 2 years
  • The individual intends to use the new dwelling as their main home
  • The deals are part of the same arrangement
  • The land being acquired doesn't exceed the "permitted area" (generally 0.5 hectares unless more is reasonably needed)
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Paragraph 2: Acquisition by property trader from individual acquiring new dwelling

2(1) Where a dwelling ("the old dwelling") is acquired by a property trader from an individual (whether alone or with other individuals), the acquisition is exempt from charge if the following conditions are met.

2(2) The conditions are— (a) that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from individuals who acquire new dwellings from house-building companies, (b) that the individual (whether alone or with other individuals) acquires a new dwelling from a house-building company, (c) that the individual— (i) occupied the old dwelling as his only or main residence at some time in the period of two years ending with the date of its acquisition, and (ii) intends to occupy the new dwelling as his only or main residence, (d) that the property trader does not intend— (i) to spend more than the permitted amount on refurbishment of the old dwelling, or (ii) to grant a lease or licence of the old dwelling, or (iii) to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling, and (e) that the area of land acquired by the property trader does not exceed the permitted area.

Plain English Explanation

A property trader doesn't have to pay SDLT when buying a property from an individual if:

  • The trader is in the business of buying homes from people who are buying new homes from house-builders
  • The individual is buying a new dwelling from a house-building company
  • The individual lived in the old property as their main home within the last 2 years
  • The individual intends to use the new dwelling as their main home
  • The property trader doesn't plan to spend too much on refurbishment, rent it out (except back to the individual for up to 6 months), or allow their staff to live in it
  • The land being acquired doesn't exceed the "permitted area"
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Paragraph 3: Acquisition by property trader from personal representatives

3(1) Where a dwelling is acquired by a property trader from the personal representatives of a deceased individual, the acquisition is exempt from charge if the following conditions are met.

3(2) The conditions are— (a) that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from personal representatives of deceased individuals, (b) that the deceased individual occupied the dwelling as his only or main residence at some time in the period of two years ending with the date of his death, (c) that the property trader does not intend— (i) to spend more than the permitted amount on refurbishment of the dwelling, or (ii) to grant a lease or licence of the dwelling, or (iii) to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the dwelling, and (d) that the area of land acquired does not exceed the permitted area.

Plain English Explanation

A property trader doesn't have to pay SDLT when buying a property from the personal representatives of someone who has died if:

  • The trader is in the business of buying homes from the estates of deceased individuals
  • The deceased person lived in the property as their main home within the last 2 years before their death
  • The property trader doesn't plan to spend too much on refurbishment, rent it out, or allow their staff to live in it
  • The land being acquired doesn't exceed the "permitted area"
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Paragraph 4: Acquisition by property trader from individual where chain of transactions breaks down

4(1) Where a dwelling ("the old dwelling") is acquired by a property trader from an individual (whether alone or with other individuals), the acquisition is exempt from charge if— (a) the individual has made arrangements to sell a dwelling ("the old dwelling") and acquire another dwelling ("the second dwelling"), (b) the arrangements to sell the old dwelling fail, and (c) the acquisition of the old dwelling is made for the purpose of enabling the individual's acquisition of the second dwelling to proceed, and the following conditions are met.

4(2) The conditions are— (a) that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from individuals in those circumstances, (b) that the individual— (i) occupied the old dwelling as his only or main residence at some time in the period of two years ending with the date of its acquisition, and (ii) intends to occupy the second dwelling as his only or main residence, (c) that the property trader does not intend— (i) to spend more than the permitted amount on refurbishment of the old dwelling, or (ii) to grant a lease or licence of the old dwelling, or (iii) to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling, and (d) that the area of land acquired does not exceed the permitted area.

Plain English Explanation

A property trader doesn't have to pay SDLT when buying a property from an individual whose property chain has broken down if:

  • The trader is in the business of buying homes from people in property chains that have broken down
  • The individual was trying to sell their old home and buy a new one, but the sale fell through
  • The trader is buying the property specifically to help the individual complete the purchase of their new property
  • The individual lived in the old property as their main home within the last 2 years
  • The individual intends to use their second/new dwelling as their main home
  • The property trader doesn't plan to spend too much on refurbishment, rent it out (except back to the individual for up to 6 months), or allow their staff to live in it
  • The land being acquired doesn't exceed the "permitted area"
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Paragraph 5: Acquisition by employer in case of relocation of employment

5(1) Where a dwelling is acquired from an individual (whether alone or with other individuals) by his employer, the acquisition is exempt from charge if the following conditions are met.

5(2) The conditions are— (a) that the individual occupied the dwelling as his only or main residence at some time in the period of two years ending with the date of the acquisition, (b) that the acquisition is made in connection with a change of residence by the individual resulting from relocation of employment, (c) that the consideration for the acquisition does not exceed the market value of the dwelling, and (d) that the area of land acquired does not exceed the permitted area.

Plain English Explanation

An employer doesn't have to pay SDLT when buying a property from an employee who is relocating for work if:

  • The employee lived in the property as their main home within the last 2 years
  • The purchase is directly related to the employee moving for work (either joining the company, changing role, or changing their place of work)
  • The employer isn't paying more than market value for the property
  • The move is necessary because the old home isn't within reasonable commuting distance of the new workplace
  • The land being acquired doesn't exceed the "permitted area"
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Paragraph 6: Acquisition by property trader in case of relocation of employment

6(1) Where a dwelling is acquired by a property trader from an individual (whether alone or with other individuals), the acquisition is exempt from charge if the following conditions are met.

6(2) The conditions are— (a) that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from individuals in connection with a change of residence resulting from relocation of employment, (b) that the individual occupied the dwelling as his only or main residence at some time in the period of two years ending with the date of the acquisition, (c) that the acquisition is made in connection with a change of residence by the individual resulting from relocation of employment, (d) that the consideration for the acquisition does not exceed the market value of the dwelling, (e) that the property trader does not intend— (i) to spend more than the permitted amount on refurbishment of the dwelling, or (ii) to grant a lease or licence of the dwelling, or (iii) to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the dwelling, and (f) that the area of land acquired does not exceed the permitted area.

Plain English Explanation

A property trader doesn't have to pay SDLT when buying a property from an individual who is relocating for work if:

  • The trader is in the business of buying homes from people who are relocating for work
  • The individual lived in the property as their main home within the last 2 years
  • The purchase is directly related to the individual moving for work
  • The trader isn't paying more than market value for the property
  • The move is necessary because the old home isn't within reasonable commuting distance of the new workplace
  • The property trader doesn't plan to spend too much on refurbishment, rent it out (except back to the individual for up to 6 months), or allow their staff to live in it
  • The land being acquired doesn't exceed the "permitted area"
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Paragraph 7: Meaning of "dwelling", "new dwelling" and "the permitted area"

7(1) "Dwelling" includes land occupied and enjoyed with the dwelling as its garden or grounds.

7(2) A building or part of a building is a "new dwelling" if— (a) it has been constructed for use as a single dwelling and has not previously been occupied, or (b) it has been adapted for use as a single dwelling and has not been occupied since its adaptation.

7(3) "The permitted area", in relation to a dwelling, means land occupied and enjoyed with the dwelling as its garden or grounds that does not exceed— (a) an area (inclusive of the site of the dwelling) of 0.5 of a hectare, or (b) such larger area as is required for the reasonable enjoyment of the dwelling as a dwelling having regard to its size and character.

Plain English Explanation

This section defines key terms:

  • A "dwelling" includes its garden and grounds
  • A "new dwelling" is either newly built and never occupied, or newly converted and never occupied since conversion
  • The "permitted area" is normally up to 0.5 hectares (including the house), but can be larger if reasonably needed for a property of that size and character
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