Stamp duty relief when a property trader buys your old home
In brief
A qualifying property trader may receive SDLT relief when it buys a seller’s old home while that seller buys a qualifying new home. The conditions are strict.
- The seller must have lived in the old home within two years.
- The seller must intend to live in the new home.
- Extra land, refurbishment, letting and occupation can affect the relief.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty relief when a property trader buys your old home
A property trader may pay no stamp duty when it buys your old home as part of your move into a qualifying new home. This is not relief for ordinary home buyers. It is a narrow rule for eligible businesses, and every condition matters.
What this rule is about
Sometimes, a new-build seller needs help to complete a sale. A business that buys and sells homes may agree to buy the seller’s existing property. Under Schedule 6A paragraph 2, a business buying the old home in that arrangement may be exempt from Stamp Duty Land Tax, which is usually called stamp duty. The rule is limited.
The rule has restrictive triggers. The relief applies only where the seller is moving from a house-building company into a qualifying new home, and the remaining statutory conditions are also satisfied. That sequence is essential. Limits after purchase also restrict what the trader can do with the old home.
The distinction is important. Describing a deal as a part exchange does not, by itself, create the relief.
What the official source says
HMRC’s manual sets out the test. A purchase can be exempt if it meets all the statutory conditions. HMRC guidance is not law, but it reflects the relief in Schedule 6A paragraph 2.
- To qualify, the buyer must be a qualifying property trader: a company, an LLP, or a partnership made up only of companies or LLPs that buys and sells homes.
- Also, the purchase must be part of a business that includes buying homes from people who buy new homes from house-building companies.
- For relief, the seller must buy a qualifying new home from a house-building company.
- During the two years before the trader buys it, the old home must have been the seller’s main or only home at some time.
- Before completion, the seller must plan to make the new home their main or only home.
- Certain intended uses prevent relief. These include excessive refurbishment, a letting, or occupation by its senior people, staff, or connected people.
- Land bought with the home must not exceed the permitted area for full relief.
For this purpose, a new home is one built or adapted as one home, provided that nobody has occupied it since that building or adaptation work was completed. That timing matters. A house-building company has a defined scope. It is a company that builds or adapts buildings for use as homes, including a connected company.
What this means in practice
Before completion, the trader must check the deal. It must be able to show both the seller’s use of the old home and the seller’s genuine plans for the new one.
Restrictions after purchase are equally important. Relief can be withdrawn after completion if the trader crosses one of the statutory lines.
- Refurbishment means work that increases, or is meant to increase, the home’s value.
- Cleaning does not count as refurbishment for this rule.
- Work needed only to meet minimum safety standards does not count either.
- For these purposes, spending on refurbishment must stay within the greater of £10,000 and 5% of the amount paid, with an absolute cap of £20,000. The ceiling applies.
- Nor may the trader grant a lease or licence of the old home.
- It must not allow its directors, members, staff, or connected people to occupy the old home.
- Seller leasebacks are limited to six months.
Withdrawal restores the tax otherwise due.
How to analyse it
Consider the facts in order. Do not begin with the label in the sales brochure or contract. Instead, begin with the buyer’s legal form, its business, and the documents for both homes.
- Confirm that the buyer meets the statutory definition of a property trader.
- Check that its business includes the type of purchase required by the relief.
- Check that the seller is buying from a qualifying house-building company.
- Check whether the new home is genuinely new or newly adapted and unoccupied since that work.
- Keep proof of qualifying old-home use. It must show that the seller used the old home as their main or only home within the previous two years.
- Record the seller’s intention to live in the new home as their main or only home.
- Identify all land included in the sale and decide which land is garden or grounds.
- Set a clear budget for works and record any plan to let or occupy the old home.
- Use HMRC’s stated relief code 28 when completing the SDLT return if the relief is claimed.
Example
Leah has lived in her house during the last two years. She buys an unoccupied new-build home from a house-building company and plans to live there. An eligible property trader buys Leah’s old house as part of this arrangement.
Leah’s house and permitted grounds are worth £400,000. With extra land, the whole property is worth £500,000. If the other conditions are met but the extra land exceeds the permitted area, the amount treated as taxable is £100,000: £500,000 less £400,000. No tax rate is assumed in this example.
Why this can be difficult in practice
Land is often the difficult part. Full relief has a 0.5 hectare limit. Normally, it covers the home and its garden or grounds, including the building site. A larger area can qualify, but only if it is needed for reasonable enjoyment of that particular home, given its size and character.
Plans for the land, access arrangements, its actual use, rights over it, and the character of the whole property may all matter when the position is assessed. Context is important.
- A large plot does not automatically prevent relief.
- Equally, land on one title does not automatically form part of the home’s grounds.
- Grazing, farming, woodland or third-party use may need close review.
- A later letting can withdraw relief even if the trader had the right intentions at completion.
- A director or employee using the home can also cause a problem.
- Work described as repairs may still be refurbishment if it is intended to increase value.
Key takeaways
- This is a targeted relief for eligible property traders, not ordinary buyers.
- The seller’s old-home use and new-home intention both matter.
- Extra land and post-purchase use can reduce or remove the relief.
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 6A para 2 — relief for property traders buying sellers’ old homes (provision not found on legislation.gov.uk)
- FA 2003 Schedule 6A para 7 — meaning of new home and permitted land area (provision not found on legislation.gov.uk)
- FA 2003 Schedule 6A para 8 — meaning of property trader and its principals (provision not found on legislation.gov.uk)
- FA 2003 Schedule 6A para 9 — refurbishment spending limit for the relief (provision not found on legislation.gov.uk)
- FA 2003 Schedule 6A para 10 — connected persons rule used for this relief (provision not found on legislation.gov.uk)
- an Act of 2010 we do not have an identifier for section 112 — statutory test for whether people are connected (no link: an Act of 2010 we do not have an identifier for)
- FA 2003 Schedule 6A para 11 — events that withdraw the property trader relief (provision not found on legislation.gov.uk)
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 extra land is part of the home’s garden or grounds, and whether more than 0.5 hectare is needed for reasonable enjoyment, depends on the property’s facts.
- The evidence needed to show the seller’s past occupation and future intention will vary.
- The supplied legislation is recorded as current only to 17 November 2025. Current primary legislation should be checked for a transaction 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.
- Signed purchase contract, transfer and completion statement — who bought the old home, what interest passed and the completion date
- Land Registry title and filed plan for every parcel — the precise land included with the old home and its boundaries
- Measured site plan, survey and land valuation — the total area and the values needed if only partial relief is available
- Dated aerial photographs, maps and site photographs — how land was laid out, accessed and used around completion
- Council tax records, utility bills and electoral records — evidence that the seller lived in the old home during the two-year period
- Reservation form, contract and transfer for the new home — that the seller bought a qualifying new home from a house-building company
- Planning history and building-control records for the new home — whether it was newly built or newly adapted and its occupation history
- Business records and company or partnership documents — whether the buyer is an eligible property trader and carries on the required business
- Refurbishment budgets, invoices and works schedules — what work was planned or done and whether spending exceeded the permitted amount
- Lease, licence, grazing or other occupation agreements — whether the old home or extra land was let, controlled or used by someone else
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 relief when a property trader buys your old home [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 6A para 2 - relief for property traders buying sellers' old homes https://www.legislation.gov.uk/ukpga/2003/14/schedule/6A/paragraph/2/2025-11-17 - FA 2003 Schedule 6A para 7 - meaning of new home and permitted land area https://www.legislation.gov.uk/ukpga/2003/14/schedule/6A/paragraph/7/2025-11-17 - FA 2003 Schedule 6A para 8 - meaning of property trader and its principals https://www.legislation.gov.uk/ukpga/2003/14/schedule/6A/paragraph/8/2025-11-17 - FA 2003 Schedule 6A para 9 - refurbishment spending limit for the relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/6A/paragraph/9/2025-11-17 - FA 2003 Schedule 6A para 10 - connected persons rule used for this relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/6A/paragraph/10/2025-11-17 - an Act of 2010 we do not have an identifier for section 112 - statutory test for whether people are connected - FA 2003 Schedule 6A para 11 - events that withdraw the property trader relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/6A/paragraph/11/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm21030 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 - Whether extra land is part of the home's garden or grounds, and whether more than 0.5 hectare is needed for reasonable enjoyment, depends on the property's facts. - The evidence needed to show the seller's past occupation and future intention will vary. - The supplied legislation is recorded as current only to 17 November 2025. Current primary legislation should be checked for a transaction 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 1 September 2026
Useful article? You may find it helpful to read the original guidance here: Stamp duty relief when a property trader buys your old home
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