Stamp duty when you buy a hotel to turn into a home
Hotel conversion and stamp duty
HMRC’s example says that a hotel bought for conversion into a family home is treated by reference to its hotel use at purchase.
- A hotel is not treated as a home for this rule.
- Future conversion plans do not decide the result.
- Check the rate in force on the transaction date.
Scroll down for the full analysis.
Read the original guidance here:
Stamp duty when you buy a hotel to turn into a home
Buying a hotel with plans to make it your family home does not automatically make it a home for stamp duty. In HMRC’s example, the hotel use decides the result, not the buyer’s plans.
What this rule is about
It distinguishes residential from non-residential property. That choice can affect which rate table applies. The key point is the building’s use when it is bought.
A hotel may contain bedrooms, bathrooms and kitchens. That does not settle the question.
What the official source says
HMRC’s manual gives an example of a £3 million hotel purchase where the building had once been a single home and the buyer planned to restore it as a family home. Those plans do not decide the result.
- A hotel, inn or similar establishment is not treated as a home for this SDLT rule.
- Its suitability for use as a home is ignored while it is used as a hotel.
- HMRC says Table B applies in its example.
- The manual’s example uses a 4% rate.
What this means in practice
In the example, the buyer’s future conversion plans do not alter the stamp duty treatment of the hotel purchase. HMRC’s stated calculation is £120,000: 4% of £3 million.
- Do not assume a former home remains residential after becoming a hotel.
- Do not assume planned building work changes the position on the purchase.
- Check the rate table that applied on your transaction date.
How to analyse it
Begin with the building’s actual use. Ignore the name in the sales details.
- What was the building actually used for when bought?
- Were rooms offered to, and used by, paying guests?
- Was any part separately used as a private home?
- What evidence records that use?
Example
Alex buys an operating hotel for £3 million and intends to convert it into a family home, but, on HMRC’s stated facts, it remains a hotel for this purpose. The plans do not change that result. The manual applies Table B and calculates tax at £120,000 using its 4% example rate.
Why this can be difficult in practice
Labels can mislead. A building marketed as a hotel may have stopped trading, or may include private living space. The facts at the time of the purchase matter.
- Business rates records help, but do not tell the whole story.
- Planning permission may show what is allowed, not what was actually happening.
- A past or planned home use does not by itself answer the question.
Key takeaways
- Hotel use can put a building outside the residential SDLT rules.
- Plans to turn it into a home may not change the purchase result.
- HMRC’s 4% example is historic and needs date-specific checking.
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 — choosing the table for residential or other land
- FA 2003 section 116 — what counts as residential property; hotels are not treated as homes; ignoring possible alternative residential 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
- Whether a property is a hotel or similar establishment can depend on the facts, including how it was actually used when bought.
- The source does not give the purchase date, so it cannot confirm whether its historic 4% rate applies to another transaction.
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 sale contract and completion statement — the property bought, price and relevant transaction date
- Land Registry title and filed plan — the land and buildings included in the purchase
- Business rates bills and rating-list entries — whether the building was recorded for hotel business use
- Hotel booking records, guest register and invoices — whether paying guests were staying there at the time
- Business accounts and tax records — whether hotel income and trading activity continued
- Dated marketing material and website snapshots — whether rooms were being advertised to guests
- Dated photographs, floor plans and a room-by-room schedule — how the building was laid out and used on the purchase date
- Planning history and permissions — the authorised use and any proposed conversion to a home
- Council tax records — whether any part was separately treated as a home
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 when you buy a hotel to turn into a 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 section 55 - choosing the table for residential or other land https://www.legislation.gov.uk/ukpga/2003/14/section/55/2025-11-17 - 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 116 - hotels are not treated as homes https://www.legislation.gov.uk/ukpga/2003/14/section/116/2025-11-17 - FA 2003 section 116 - ignoring possible alternative residential use https://www.legislation.gov.uk/ukpga/2003/14/section/116/2025-11-17 HMRC's guidance page on this topic (guidance, not law): https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm30070 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 a property is a hotel or similar establishment can depend on the facts, including how it was actually used when bought. - The source does not give the purchase date, so it cannot confirm whether its historic 4% rate applies to another transaction. 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 when you buy a hotel to turn into a home
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