Stamp duty on a company home for employees: when 17% may not apply
Company homes for employees
A high-value home bought by a company for genuine staff or partner accommodation may fall outside the 17% SDLT charge. The conditions are strict and continue for three years.
- The business must be commercial and profit-making.
- The home must be used solely or mainly for that business.
- Check employee and partner ownership interests before relying on the exception.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty on a company home for employees: when 17% may not apply
Stamp duty on a company home for employees: when 17% may not apply
A company that buys an expensive home for staff may avoid the 17% stamp duty charge. This is not automatic. Real employee or partner accommodation, linked mainly to a commercial, profit-making business, is required.
What this rule is about
Some companies and similar buyers face a special 17% SDLT charge when buying one high-value home. A high-value home interest is one where more than £500,000 of the price relates to that home.
An exception exists for genuine business accommodation. It recognises that a business may need a flat or house for staff who work away from home, visit the UK, or move for a role.
This distinction can make a very large difference to the tax bill.
What the official source says
HMRC’s manual says that the 17% charge will not apply where the statutory conditions for employee or partner accommodation are met. HMRC says the purchase will instead be charged at the higher rates for additional homes.
Only when all of these points are met does the legislation switch off the 17% charge:
- The buyer, or a company in its SDLT group, runs or will run a commercial business for profit.
- A trade or a property rental business can qualify as the business.
- Purchase of the home is for the provision of living accommodation for qualifying employees or partners.
- That accommodation is provided solely or mainly for the purposes of that business.
- If the buyer is a company, another group company can run the relevant business.
- At the time the purchase takes effect, there is no need to name the intended employee or partner.
- Family members may share the home with that employee or partner.
For this purpose, a qualifying employee works for the relevant business. Employment includes holding an office. A qualifying partner is an individual member of the partnership that runs the business.
Important limits apply. The condition can fail if the planned occupants include a partner or employee with a 10% or greater share in the business, the owning company, or the home. It can also fail where the person is employed to provide domestic services for someone connected with a beneficial owner.
What this means in practice
Simply calling a flat a staff flat is not enough. Both the purpose of the purchase and the actual use must support the business case.
For example, HMRC gives the type of case where an international company keeps a London flat for staff visiting from overseas offices or moving to the UK on secondment. Use by different staff over time does not stop the exception applying.
- Keep a clear record of why the business needs the home.
- Record which roles can use it and why.
- Check whether any intended user has a 10% or greater stake.
- Check the buyer’s group relationship with the business using the home.
- Do not treat a director’s private home as staff accommodation without testing the detailed rules.
HMRC’s manual is guidance, not law. The legal test is in Schedule 4A. Also, whether the higher rates for additional homes apply is a separate statutory question under Schedule 4ZA.
How to analyse it
Start with the facts at the date the purchase takes effect. Then test the ongoing position. This matters because the exception has a three-year control period.
- Work out whether the purchase would otherwise fall within the 17% charge.
- Check that more than £500,000 is attributable to the single home in question.
- Identify the buying entity and any company group.
- Identify the business that will provide the accommodation.
- Check that it is run commercially and with a view to profit.
- Establish the intended purpose of the accommodation.
- Check each likely occupant’s employment, partnership and ownership position.
- Review whether the home is used solely or mainly for the business purpose.
- Check the separate higher-rates rules rather than assuming the final SDLT rate.
A group relationship has a specific meaning here. Broadly, it uses the SDLT group test based on 75% subsidiary relationships. An informal business connection will not do.
Example
Northshore Ltd buys a £600,000 London flat. It plans to make it available to employees arriving from its overseas offices for short UK secondments. Northshore’s UK group company runs a commercial, profit-making trade and manages the flat.
No employee has been selected when the purchase takes effect. That alone does not prevent the exception. If the flat is genuinely held and made available mainly for that business purpose, the 17% charge may not apply. Northshore must still test the separate higher-rates rules and keep the conditions under review.
Change one fact: the flat is really intended for a senior employee who has a 10% share in the company. The statutory employee condition may then fail. That ownership point is easy to miss.
Why this can be difficult in practice
Usually, purpose is the hard question. A home may be empty between staff visits, or used by several people across the year. That does not by itself decide the answer. The business reason, the availability policy and what actually happens all matter.
Rules also continue after completion. During the three years from the effective date, the business must continue, and the home must remain available for the required employee or partner purpose while the buyer holds the relevant interest.
- A temporary gap may be protected if reasonable steps are being taken to make the home available again.
- An unforeseen event outside the buyer’s control may mean it is not reasonable to expect the conditions to be met.
- A change to private use can put the exception at risk.
- A sale or change in the holding structure may need careful review.
- If the exception is withdrawn, a further SDLT return and payment are required within 30 days of the relevant date.
Key takeaways
- A company staff home can escape the 17% charge, but only under a narrow business exception.
- The business purpose and the occupants’ ownership interests are central.
- Keep evidence and monitor the arrangement for three years.
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 1 — high-value home interests and the £500,000 threshold
- FA 2003 Schedule 4A para 2 — splitting high-value home interests from other property
- FA 2003 Schedule 4A para 3 — 17% rate for certain company home purchases
- FA 2003 Schedule 4A para 5D — exception for employee or partner accommodation
- FA 2003 Schedule 4A para 5E — who can count as an employee or partner
- FA 2003 Schedule 4A para 5J — three-year conditions and withdrawal of the exception
- FA 2003 Schedule 4ZA para 1 — higher SDLT rates for additional homes
- FA 2003 Schedule 4ZA para 2 — how a higher-rates transaction is identified
- FA 2003 Schedule 4ZA para 4A — higher rates for a non-individual buying one home (provision not found on legislation.gov.uk)
- FA 2003 section 81 — further return and payment after relief withdrawal
- FA 2003 Schedule 7 para 1 — meaning of a group of companies
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 home is made available solely or mainly for a business purpose depends on the real arrangements and evidence.
- Whether an employee has a disqualifying 10% interest can require detailed review of profit, company and property ownership.
- The supplied consolidated Schedule 4A text is current only to 17 November 2025. Current primary legislation should be checked for a purchase after that date.
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.
- The purchase contract and price split for each home bought
- The buyer’s legal form and group structure
- Business accounts and evidence that the business is commercial and profit-making
- A written policy or records showing who may use the home
- Employment or partnership records for intended occupants
- Ownership and profit-share details for occupants and connected people
- Records showing the home remained available for the business during the three-year period
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 Stamp duty on a company home for employees: when 17% may not apply [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 1 - high-value home interests and the £500,000 threshold https://www.legislation.gov.uk/ukpga/2003/14/schedule/4A/paragraph/1/2025-11-17 - FA 2003 Schedule 4A para 2 - splitting high-value home interests from other property https://www.legislation.gov.uk/ukpga/2003/14/schedule/4A/paragraph/2/2025-11-17 - FA 2003 Schedule 4A para 3 - 17% rate for certain company home purchases https://www.legislation.gov.uk/ukpga/2003/14/schedule/4A/paragraph/3/2025-11-17 - FA 2003 Schedule 4A para 5D - exception for employee or partner accommodation https://www.legislation.gov.uk/ukpga/2003/14/schedule/4A/paragraph/5D/2025-11-17 - FA 2003 Schedule 4A para 5E - who can count as an employee or partner https://www.legislation.gov.uk/ukpga/2003/14/schedule/4A/paragraph/5E/2025-11-17 - FA 2003 Schedule 4A para 5J - three-year conditions and withdrawal of the exception https://www.legislation.gov.uk/ukpga/2003/14/schedule/4A/paragraph/5J/2025-11-17 - FA 2003 Schedule 4ZA para 1 - higher SDLT rates for additional homes https://www.legislation.gov.uk/ukpga/2003/14/schedule/4ZA/paragraph/1/2025-11-17 - FA 2003 Schedule 4ZA para 2 - how a higher-rates transaction is identified https://www.legislation.gov.uk/ukpga/2003/14/schedule/4ZA/paragraph/2/2025-11-17 - FA 2003 Schedule 4ZA para 4A - higher rates for a non-individual buying one home https://www.legislation.gov.uk/ukpga/2003/14/schedule/4ZA/paragraph/4A/2025-11-17 - FA 2003 section 81 - further return and payment after relief withdrawal https://www.legislation.gov.uk/ukpga/2003/14/section/81/2025-11-17 - FA 2003 Schedule 7 para 1 - meaning of a group of companies https://www.legislation.gov.uk/ukpga/2003/14/schedule/7/paragraph/1/2025-11-17 Guidance page from HMRC on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09620 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 home is made available solely or mainly for a business purpose depends on the real arrangements and evidence. - Whether an employee has a disqualifying 10% interest can require detailed review of profit, company and property ownership. - The supplied consolidated Schedule 4A text is current only to 17 November 2025. Current primary legislation should be checked for a purchase after that date. 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: Stamp duty on a company home for employees: when 17% may not apply
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