Buying homes and shops together: HMRC’s stamp duty example
In short
HMRC’s example separates four houses from two linked shops when calculating stamp duty. The home calculation uses an average price, while the shop calculation is a proportion of tax on the total linked value.
- The total linked value is £1,500,000.
- The houses total £1,200,000 and the shops total £300,000.
- The effective date must be checked before relying on the historic relief.
Scroll down for the full analysis.
Read the original guidance here:
Buying homes and shops together: HMRC’s stamp duty example
If you buy several homes and shops as part of one plan, HMRC may not calculate stamp duty as one simple total. HMRC’s example separates the home part from the shop part. That split can change the tax.
What this rule is about
This example concerns the historic relief for buying more than one home at once, often called multiple dwellings relief. It also shows what happens when the same overall deal includes commercial property.
Homes and shops do not go through the same part of the calculation. Even so, linked deals can still affect each other.
What the official source says
HMRC gives an example of one individual buying four houses in one deal and two shops in a separate linked deal. Together, the properties are worth £1,500,000.
- The four houses cost £1,200,000 in total.
- Two houses cost £250,000 each.
- Two houses cost £350,000 each.
- The two shops cost £150,000 each, or £300,000 together.
- HMRC treats the house deal as one that can use the historic relief.
- HMRC does not treat the shop deal as one that can use it.
For the houses, HMRC divides £1,200,000 by four. That produces an average price of £300,000 per home. HMRC calculates the tax on £300,000, then multiplies that answer by four.
Because the shops account for £300,000 of the £1,500,000 total, HMRC then takes 20% of the tax that it calculates on the full linked value of £1,500,000 for the shops. That produces their share.
In this example, HMRC says the higher rates for additional homes apply to the house deal. If the buyer is not UK resident, the non-resident rates may matter too.
What this means in practice
Do not assume that buying a shop with homes turns the whole purchase into a commercial one. Equally, do not assume the home calculation can ignore the linked shop deal.
Here, the calculation has two parts. One part uses the average price of the homes. For the other, HMRC takes a share of tax calculated using the whole linked value.
- Identify every property included in the overall arrangement.
- Separate the amount paid for homes from the amount paid for shops or other commercial property.
- Check whether the separate contracts are linked.
- Check the tax rates that applied on the effective date.
When homes and shops form one planned acquisition under separate contracts, you cannot always calculate stamp duty separately for each contract, despite their formal separation. That matters.
How to analyse it
Start with the facts, not the label on the contract. The same parties, or connected parties, can link two purchases by making them part of one scheme, arrangement or series.
- List the properties and the price paid for each one.
- Decide which properties are homes and which are not.
- Check whether the purchases are linked under the statutory test.
- Work out whether the historic multiple homes relief was available on the transaction date.
- For the home part, divide the total home price by the number of homes.
- Calculate the commercial part using the linked-value apportionment shown in HMRC’s example.
- Check whether higher rates or non-resident rates apply.
What decides the result? The real arrangement, the property split and the law in force on the date that counts.
Example
Imagine Priya buys four houses for £1,200,000 and, in a linked purchase that forms part of the same overall arrangement, two shops for £300,000. Both deals total £1,500,000.
Following HMRC’s example, the home figure is £1,200,000 divided by four: £300,000. HMRC calculates tax on £300,000 and multiplies it by four. For the shops, HMRC takes 20% of the tax calculated on £1,500,000, since £300,000 is one fifth of the total.
The example does not provide a final tax bill. You need the correct rate table for the relevant date before doing that.
Why this can be difficult in practice
The arithmetic is not the hardest part. Usually, the factual circumstances show whether the deals are linked and how much of the price properly belongs to each property.
You might think a different contract lets you ignore the shops. If the purchases are linked, you cannot ignore them.
- A price split must be fair and reasonable, not simply convenient.
- A building may need closer checking before it is treated as a home.
- The higher rates need a separate check, even where the historic relief calculation is used.
- The source gives no date, so it cannot confirm the relief or rates for a current purchase.
Key takeaways
- HMRC’s example calculates the four houses and two shops differently.
- Linked contracts can affect tax even when they cover different types of property.
- Check the transaction date before relying on this historic example.
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 55 — tax calculation for linked land purchases
- FA 2003 section 108 — when separate purchases are linked
- FA 2003 section 116 — what counts as residential property
- FA 2003 section 58D — multiple homes relief and how it is claimed
- FA 2003 Schedule 6B para 2 — purchases that can qualify for multiple homes relief
- FA 2003 Schedule 6B para 4 — splitting the price between homes and other property
- FA 2003 Schedule 6B para 5 — calculating tax on homes and other property
- FA 2003 Schedule 4ZA para 5 — higher rates for purchases of multiple 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
- No effective date is given. That date is needed to check whether the historic multiple homes relief was available and which rate table applied.
- The source assumes that the houses are separate homes and that the higher-rate conditions are met. A real purchase needs its own fact check.
- The source says non-resident rates may apply, but gives no residence facts.
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 contracts, transfer documents and completion dates for both purchases.
- Evidence showing why the house and shop purchases form one arrangement.
- A fair split of the total price between each house and each shop.
- Details of the buyer’s UK residence and other property interests on the relevant 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 Buying homes and shops together: HMRC’s stamp duty example [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 55 - tax calculation for linked land purchases https://www.legislation.gov.uk/ukpga/2003/14/section/55/2025-11-17 - FA 2003 section 108 - when separate purchases are linked https://www.legislation.gov.uk/ukpga/2003/14/section/108/2025-11-17 - FA 2003 section 116 - what counts as residential property https://www.legislation.gov.uk/ukpga/2003/14/section/116/2025-11-17 - FA 2003 section 58D - multiple homes relief and how it is claimed https://www.legislation.gov.uk/ukpga/2003/14/section/58D/2025-11-17 - FA 2003 Schedule 6B para 2 - purchases that can qualify for multiple homes relief https://www.legislation.gov.uk/ukpga/2003/14/schedule/6B/paragraph/2/2025-11-17 - FA 2003 Schedule 6B para 4 - splitting the price between homes and other property https://www.legislation.gov.uk/ukpga/2003/14/schedule/6B/paragraph/4/2025-11-17 - FA 2003 Schedule 6B para 5 - calculating tax on homes and other property https://www.legislation.gov.uk/ukpga/2003/14/schedule/6B/paragraph/5/2025-11-17 - FA 2003 Schedule 4ZA para 5 - higher rates for purchases of multiple homes https://www.legislation.gov.uk/ukpga/2003/14/schedule/4ZA/paragraph/5/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm29977 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 - No effective date is given. That date is needed to check whether the historic multiple homes relief was available and which rate table applied. - The source assumes that the houses are separate homes and that the higher-rate conditions are met. A real purchase needs its own fact check. - The source says non-resident rates may apply, but gives no residence facts. 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: Buying homes and shops together: HMRC’s stamp duty example
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