Stamp Duty Land Tax: Higher Rate Charge for Non-Natural Persons on Residential Property

When SDLT relief for employee or partner accommodation can be withdrawn

A company or other non-natural person may lose relief from the 15% SDLT charge on a dwelling bought for employee or partner accommodation if the conditions are not met during the three years after purchase. The relief is not decided only on the purchase date, so later changes in use, business activity or occupation can cause the higher rate to apply.

• The buyer, or a relevant group member, must carry on a genuine trade on a commercial basis with a view to profit.
• The dwelling must be made available as living accommodation for qualifying employees or partners, not just any occupier.
• The accommodation must be provided solely or mainly for the purposes of that trade.
• If the property is empty or not yet occupied, reasonable steps must be taken to bring it into, or back into, qualifying use.
• The rules apply across a three-year control period, so relief that was valid at purchase can still be withdrawn later.
• Good records are important to show how the property was used, who lived there and what steps were taken during any gap in occupation.

Scroll down for the full analysis.

When relief for employee or partner accommodation can be withdrawn from the SDLT higher rates for certain non-natural persons

This page explains when a company or other non-natural person can lose relief from the 15% SDLT charge if it buys a dwelling intending to use it as accommodation for certain employees or partners. The rule matters because the relief is not simply tested on the purchase date. It can be withdrawn if the property is not used in the required way during a three-year period after the transaction.

What this rule is about

Some acquisitions of residential property by companies and other non-natural persons can fall within the higher rate charge in Schedule 4A to Finance Act 2003. Relief may be available where a dwelling is acquired to house certain employees or partners for business purposes.

The source material deals with what happens after that relief has been claimed. It sets out situations in which the relief is withdrawn. In other words, even if the relief was available when the property was bought, it can later be lost if the conditions are not met during the relevant post-acquisition period.

What the official source says

HMRC says that relief is withdrawn if, within the three-year control period, any of the following conditions is not met:

• the purchaser, or a relevant group member, is carrying on a trade on a commercial basis with a view to profit;
• the dwelling has been made available to qualifying employees or partners as living accommodation; and
• the dwelling is made available solely or mainly for the purposes of that trade.

HMRC also says relief is withdrawn if, during that control period, the dwelling has either not yet been made available to qualifying employees or partners, or has stopped being made available to them, and reasonable steps are not being taken to ensure that it will be used in that way.

What this means in practice

This is an ongoing conditions test. The buyer does not just need a qualifying intention at the time of purchase. The property must actually be used, or be in the process of being put into use, in the required way during the three-year control period.

The practical questions are:

• Is there a genuine trade being carried on commercially and with a view to profit?
• Is the dwelling actually being used as living accommodation by qualifying employees or partners?
• Is that use connected solely or mainly with the trade?
• If the property is not yet occupied, or is temporarily vacant, are reasonable steps being taken to bring it back into qualifying use?

If the answer to any of those points becomes no during the control period, the relief may be withdrawn. That means the transaction may effectively be brought back within the higher rate charge.

This is especially important where a property is bought before staff move in, where occupation is interrupted, or where the business changes its plans after completion.

How to analyse it

A sensible way to approach the rule is to work through the conditions in order.

First, identify the relevant trade. The source requires a trade carried on on a commercial basis with a view to profit. That points to a real business activity, not merely passive ownership of a dwelling.

Second, check who the dwelling is for. The source refers to qualifying employees or partners. The relief is tied to occupation by that class of person, not just any occupier.

Third, look at the purpose of making the dwelling available. It must be made available solely or mainly for the purposes of the trade. This requires a connection between the accommodation and the business need. If the property is being used mainly for another reason, the condition may fail.

Fourth, consider timing and continuity. The source recognises that there may be periods when the dwelling has not yet been occupied, or has ceased to be occupied, by qualifying employees or partners. That does not automatically end the relief if reasonable steps are being taken to secure qualifying use. The facts will matter.

Finally, test the position across the whole three-year control period, not just at one moment. A relief that was valid at the outset can still be withdrawn later if the conditions stop being met.

Example

A trading company buys a house near a remote work site and claims relief on the basis that it will be used to house qualifying employees. For the first year, employees live there while working on the business’s operations. That is likely to fit the intended use described in the source.

If the company then stops using the house for employees and instead leaves it empty with no real effort to re-occupy it for staff, HMRC’s stated position is that relief may be withdrawn during the three-year control period.

By contrast, if the house becomes temporarily vacant because one employee leaves and the company is actively arranging for another qualifying employee to move in, the question becomes whether reasonable steps are being taken to ensure continued qualifying use.

Why this can be difficult in practice

Several parts of this rule are fact-sensitive.

The phrase commercial basis with a view to profit is familiar in tax law, but whether it is met depends on the real nature of the activity.

The expression solely or mainly for the purposes of the trade also requires judgement. A property may serve both business and non-business purposes. The source does not spell out how mixed motives should be weighed in every case.

The idea of reasonable steps is also open-textured. It suggests that temporary vacancy will not necessarily be fatal, but there must be evidence of active steps to secure or restore qualifying occupation. What is reasonable may depend on matters such as location, recruitment timing, the condition of the property, and whether there is a genuine continuing business need for staff accommodation.

Another practical difficulty is record-keeping. Because withdrawal depends on events during the control period, the purchaser should be able to show how the property was used, who occupied it, why it was needed for the trade, and what steps were taken during any gap in occupation.

Key takeaways

• Relief for employee or partner accommodation can be lost after the purchase if the required conditions are not met during the three-year control period.
• The dwelling must be linked to a genuine commercial trade and made available to qualifying employees or partners as living accommodation, solely or mainly for the purposes of that trade.
• Temporary non-occupation may still be acceptable if reasonable steps are being taken to secure qualifying use, but that is a fact-sensitive question.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Stamp Duty Land Tax: Higher Rate Charge for Non-Natural Persons on Residential Property

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