SDLT Freeport relief where land includes homes
In short
HMRC says a mixed Freeport or Investment Zone purchase can receive full SDLT relief where qualifying land represents at least 90% of the amount paid.
- Homes on separate non-qualifying land may not withdraw relief.
- Homes on qualifying land can withdraw it.
- Site plans and valuations are central evidence.
Scroll down for the full analysis.
Read the original guidance here:
SDLT Freeport relief where land includes homes
Land acquired for homes will not usually qualify for this stamp duty relief. There is one important exception. HMRC says the whole purchase can still receive relief under the 100% rule, even where a small separate area may be used for homes.
What this rule is about
Freeports and Investment Zones use the same SDLT relief framework for land in a special tax site. The rules target land for qualifying commercial activity. A home, or its garden, is not a qualifying commercial use.
That sounds simple. Mixed sites make it harder.
When a development combines warehouses, offices or other business space with land for homes, the key question is which land qualifies and what share of the price it represents. Homes alone do not decide it.
What the official source says
HMRC’s manual says land or buildings intended for residential purposes do not qualify for relief unless the purchase falls within the 100% relief rule. Under that rule, relief can cover the whole amount paid where at least 90% of it is attributable to qualifying land.
- Qualifying land must be inside a designated special tax site.
- On the effective date, the buyer must intend to use that land exclusively for qualifying use.
- Qualifying use is commercial use, commercial development or commercial rental activity.
- A home or land used as its garden or grounds is not qualifying use.
- HMRC says the 100% rule applies where qualifying land accounts for 90% or more of the amount paid, provided that land meets the relevant qualifying conditions. The balance may be non-qualifying.
- A separate non-qualifying area may be used for a residential development in that situation.
The manual makes a further point. Where relief is available under the 100% rule, only the land that met the qualifying-land condition is tested for later qualifying use. That distinction can decide whether relief is later lost.
What this means in practice
You should separate the site into clear areas before claiming relief. One area may be inside the special tax site and planned for business use. Another may lie outside it, with homes planned there.
Do not assume that every acre must be commercial. HMRC’s example shows why.
- On HMRC’s view, a residential scheme on a separate non-qualifying area does not, by itself, withdraw relief, even when it forms part of a wider mixed development. The qualifying area remains the focus.
- Using any part of the qualifying area for that residential scheme is different.
- That use can mean the qualifying area is no longer used exclusively in a qualifying way.
- To support the position in the SDLT return, the site boundary and development layout must correspond throughout the plans, valuation evidence and intended uses. They must align.
This is the part people get wrong: the later-use condition follows the qualifying land, not automatically every part of the wider purchase.
How to analyse it
Start with a map, not a label. Calling a project an Investment Zone development does not decide the SDLT result. Work through the land area, intended use and price split in that order.
- Identify the land bought under the purchase contract.
- Mark the boundary of the designated special tax site.
- Identify the part inside that boundary.
- Check the intended use of that part on the effective date.
- Separate land planned for homes from land planned for qualifying commercial use.
- Obtain support for the value assigned to each part of the land.
- Calculate whether qualifying land represents at least 90% of the total amount paid.
- After purchase, keep the qualifying area in exclusive qualifying use.
What matters most? The physical boundary and the value split. When the project name points one way but the boundary, layout and values point another, a planning drawing, site plan and sound valuation may matter more. Documents carry the weight.
Example
HMRC gives an example of a buyer paying £2,500,000 for 25 acres. Twenty acres are inside the special tax site and intended for qualifying use. Those 20 acres are valued at £2,375,000, which is 95% of the total price.
HMRC says relief is available for the full £2,500,000 because the qualifying land accounts for at least 90% of the amount paid. The other five acres are outside the site. On the facts given, they could be used for homes without withdrawing the relief.
There is a limit. If part of the 20 qualifying acres is instead used for the residential development, HMRC says the relief claimed would be withdrawn.
Why this can be difficult in practice
A large site rarely stays still. Plans change, land is revalued and a proposed business area may later become housing. The original intention and the actual later use both need careful records.
- A boundary line on a plan may cut through a wider development plot.
- A single price for the whole site may need a defensible split between areas.
- Land outside the special tax site is not qualifying land merely because it is next to it.
- Building homes on qualifying land is not the same as building them on a separate area.
- HMRC’s manual is its view, rather than a binding statement of the law.
If the figures are close to 90%, small valuation changes can matter a great deal. The source does not explain how to value a difficult mixed site. That is a genuine fact-sensitive point.
Key takeaways
- Residential land normally does not qualify for this SDLT relief.
- HMRC says the 100% rule can cover a mixed purchase.
- Only qualifying land must keep its qualifying commercial use after purchase.
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 section 61A — relief for land in special tax sites
- FA 2003 Schedule 6C para 2 — when land counts as qualifying land
- FA 2003 Schedule 6C para 3 — uses that count as qualifying commercial use
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
- The supplied statutory extract does not include the full text setting out the 100% relief calculation. The 90% test and its residential effect are therefore stated as HMRC’s published view.
- The answer can turn on how the price is fairly split between land inside and outside the special tax site.
- Current-law verification is needed for a purchase with an effective date after 17 November 2025.
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 plan showing the special tax site boundary
- A valuation splitting the price between each area of land
- Plans showing where any homes will be built
- Records of the intended commercial use of qualifying land
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 SDLT Freeport relief where land includes homes [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 section 61A - relief for land in special tax sites https://www.legislation.gov.uk/ukpga/2003/14/section/61A/2025-11-17 - FA 2003 Schedule 6C para 2 - when land counts as qualifying land https://www.legislation.gov.uk/ukpga/2003/14/schedule/6C/paragraph/2/2025-11-17 - FA 2003 Schedule 6C para 3 - uses that count as qualifying commercial use https://www.legislation.gov.uk/ukpga/2003/14/schedule/6C/paragraph/3/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm20310 HOW I WANT YOU TO ANSWER 1. Work from the legislation above. Read it before answering. HMRC guidance is HMRC's 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 - The supplied statutory extract does not include the full text setting out the 100% relief calculation. The 90% test and its residential effect are therefore stated as HMRC's published view. - The answer can turn on how the price is fairly split between land inside and outside the special tax site. - Current-law verification is needed for a purchase with an effective date after 17 November 2025. 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 1 September 2026
Useful article? You may find it helpful to read the original guidance here: SDLT Freeport relief where land includes homes
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