When care homes, hotels and student housing are not homes for this SDLT test
In short
For the Schedule 4A company higher-rate test, several types of residential building do not count as homes. This includes hotels, care homes, hospitals, prisons, halls of residence and specified accommodation for pupils, students and armed forces members.
- Actual use matters.
- Possible use as flats is ignored for listed buildings.
- HMRC’s manual is guidance; the legislation is the law.
Scroll down for the full analysis.
Read the original guidance here:
When care homes, hotels and student housing are not homes for this SDLT test
When care homes, hotels and student housing are not homes for this SDLT test
Although a building may look like a home, it can still fall outside a special stamp duty test for certain company-related purchases. This issue matters when advisers consider the higher SDLT rate in Schedule 4A. Buyers must usually ask how the building is actually used.
What this rule is about
Schedule 4A contains a higher-rate rule for some high-value home purchases by companies and similar buyers. It has its own definition of a dwelling, which is the legal word for a home in this test.
Certain types of residential accommodation leave a building out, even where people live there.
That distinction can require buyers to consider different SDLT rules.
What the official source says
HMRC’s manual says that the following buildings do not count as homes for this Schedule 4A test. The legislation reaches that result by referring to the uses listed in section 116(2) and section 116(3).
- Accommodation for school pupils.
- Student accommodation, except halls for further or higher education students.
- Accommodation for members of the armed forces.
- An institution where at least 90% of residents have it as their sole or main home, provided it is not one of the excluded institutions below.
- Institutions providing accommodation for children, including children’s homes.
- Halls of residence for students in further or higher education.
- Care homes or institutions providing personal care for people who need it because of age, disability, alcohol or drug dependence, or mental disorder.
- Hospitals or hospices.
- Prisons or similar establishments.
- A hotel, inn or similar establishment.
There is an important extra point. When operators use a building for one of those listed purposes, Schedule 4A tells readers to ignore the fact that it might also be suitable for use as an ordinary home.
What this means in practice
You cannot settle this point by looking at a sales brochure, a planning label or the number of bedrooms. A hotel may have rooms, kitchens and bathrooms. A hotel operator does not turn the building into a home for this particular test by using it as a hotel.
Nor should advisers conclude that every building with residents is excluded. The type of accommodation and the way it operates matter.
- Start with the building’s real use, not its appearance.
- Check whether that use matches one of the statutory categories.
- Consider each distinct part if the purchase includes mixed buildings.
- Keep records that show who lives there and what services are provided.
- Do not assume that a possible future conversion changes the current-use answer.
How to analyse it
Work through the question in a sensible order. First decide whether Schedule 4A is relevant at all. Then identify exactly what is being bought and how it is used at the relevant time.
- Is the buyer a company or another type of buyer covered by the Schedule 4A higher-rate rule?
- Does the purchase include a building, or part of one, that might otherwise count as a home?
- What is that building actually used for?
- Does its use fit a category in section 116(2) or section 116(3)?
- If it is an institution, does the 90% sole-or-main-home condition need checking?
- Is any claim based only on the building being suitable for ordinary living?
- Does the purchase include other land or buildings that need separate consideration?
What actually decides the issue? Usually, it is the use on the ground. Names used in marketing material may help explain the facts, but they do not replace the statutory test.
Example
North Street Ltd buys a building run as a hotel. The rooms could physically be used as flats after major changes, and the company plans to explore that later. At the time of the purchase, however, the building is used as a hotel. Under this narrow Schedule 4A rule, its possible suitability as flats is ignored.
Change one fact and the analysis may change. If the hotel had stopped operating and its use had changed before the purchase, the evidence about its present use would need much closer examination.
Why this can be difficult in practice
Some properties sit between familiar labels. A building may offer long stays, meals, care, support or student rooms without fitting neatly into a single description. The facts matter more than the name above the door.
This is the part people get wrong: section 116 has categories that normally treat some accommodation as residential property, but Schedule 4A excludes both the section 116(2) and section 116(3) categories from its own home test.
- A residential-looking building is not automatically included.
- A listed use is not defeated because the rooms could be ordinary flats.
- Student accommodation and student halls are treated differently in the section 116 list.
- The 90% test applies only to the institution category described in section 116(2)(d).
- A future plan for the site is not necessarily its use when the purchase takes place.
- HMRC’s manual explains its view, but the statute remains the legal test.
Key takeaways
- Schedule 4A uses a special and narrow definition of a home.
- Hotels, care settings, halls and other listed buildings are excluded from that test.
- Focus on actual use and keep evidence that supports it.
Technical analysis
For advisers, and for anyone who wants to check the law behind this page. You do not need this section to understand the guidance above.
Legislation
- FA 2003 Schedule 4A para 3 — higher rate for certain company-related home purchases
- FA 2003 Schedule 4A para 7 — basic test for a building to count; unbuilt homes treated as included in some cases; specified residential buildings excluded from this schedule test; suitability for another use ignored for excluded buildings
- FA 2003 section 116 — specified residential buildings normally treated as homes; specified residential buildings normally excluded as homes
Official guidance
The pages below are HMRC’s guidance. Guidance is not law. It sets out how HMRC reads the legislation, and it is not binding on you, on a tribunal or on a court. Where guidance and the legislation differ, the legislation wins. HMRC can also change or withdraw guidance, and it may not cover your facts.
Where this is not settled
- Whether a particular property is used for one of the listed purposes can depend on detailed facts, including its residents, services and operation.
- The supplied statutory material is current only to 17 November 2025 for Schedule 4A. A purchase after that date needs a current-law check.
Evidence you would need
This kind of case is decided on the facts of the individual property. These are the records that usually settle it, and the ones an adviser would ask you for.
- A clear description of the building and each part being bought
- Evidence of how the building is actually used at the relevant time
- Information about residents, occupants and services provided
- For an institution under section 116(2)(d), evidence that at least 90% of residents have it as their sole or main residence
- The buyer’s legal status and the transaction date
Explore this with an AI
Readers often want to test their own situation. Copy the prompt below into ChatGPT, Claude or Gemini. It hands the model the actual legislation for this page rather than letting it answer from memory, and tells it to be explicit about what is uncertain. What comes back is information, not advice – check it against the links above.
I am researching UK Stamp Duty Land Tax (SDLT), which applies in England and Northern Ireland. MY QUESTION When care homes, hotels and student housing are not homes for this SDLT test [Replace this with your own situation: what you are buying, the price, the dates, who the buyer is, and what you plan to do with the property.] THE LAW THIS TURNS ON - FA 2003 Schedule 4A para 3 - higher rate for certain company-related home purchases https://www.legislation.gov.uk/ukpga/2003/14/schedule/4A/paragraph/3/2025-11-17 - FA 2003 Schedule 4A para 7 - basic test for a building to count https://www.legislation.gov.uk/ukpga/2003/14/schedule/4A/paragraph/7/2025-11-17 - FA 2003 Schedule 4A para 7 - unbuilt homes treated as included in some cases https://www.legislation.gov.uk/ukpga/2003/14/schedule/4A/paragraph/7/2025-11-17 - FA 2003 Schedule 4A para 7 - specified residential buildings excluded from this schedule test https://www.legislation.gov.uk/ukpga/2003/14/schedule/4A/paragraph/7/2025-11-17 - FA 2003 Schedule 4A para 7 - suitability for another use ignored for excluded buildings https://www.legislation.gov.uk/ukpga/2003/14/schedule/4A/paragraph/7/2025-11-17 - FA 2003 section 116 - specified residential buildings normally treated as homes https://www.legislation.gov.uk/ukpga/2003/14/section/116/2025-11-17 - FA 2003 section 116 - specified residential buildings normally excluded as homes https://www.legislation.gov.uk/ukpga/2003/14/section/116/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09530 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. Guidance from HMRC is its view of the law, not the law, and does not bind a tribunal or a court. 2. Tell me what the rule actually requires, in plain English. 3. Tell me which facts decide the answer, and which facts would change it. 4. Tell me what evidence I would need to support the position. 5. Be explicit about anything unsettled or fact-sensitive. Do not guess. 6. Your training data has a cutoff and SDLT rates and reliefs change at fiscal events. Say so if you are not sure the law is current. POINTS ALREADY KNOWN TO BE UNCERTAIN ON THIS TOPIC - Whether a particular property is used for one of the listed purposes can depend on detailed facts, including its residents, services and operation. - The supplied statutory material is current only to 17 November 2025 for Schedule 4A. A purchase after that date needs a current-law check. Do not give me a conclusion you cannot support from the provisions above.
Legislation links show Finance Act 2003 as it stood on 2025-11-17. The law may have changed since, and the rules that apply are those in force on the date of your transaction. The official guidance this page is based on is here.
This page was last updated on 31 August 2026
Useful article? You may find it helpful to read the original guidance here: When care homes, hotels and student housing are not homes for this SDLT test
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