Property Trader Relief Explainer
This tool helps you understand if your property transaction might qualify for Stamp Duty Land Tax (SDLT) relief under Schedule 6A of the Finance Act 2003. If you qualify, you pay NO stamp duty on the transaction - a potential 100% saving. This is not financial advice.
What is Property Trader Relief? This relief provides a complete exemption from SDLT in qualifying circumstances related to property chain situations and employment relocations.
Note: The results provided are based on the information you provide and are for guidance only. For definitive advice, please consult a tax professional.
Key terms: Property trader, House-building company, New dwelling, Permitted area
SDLT Savings Calculator
Use this calculator to understand how much SDLT you could potentially save if your transaction qualifies for relief:
Your Potential SDLT Savings:
Without relief, you would pay:
With relief, you would pay: £0
Total savings:
Need More Help?
If you have questions about property trader relief or would like professional assistance with your transaction, please get in touch:
Guidance for Property Traders
What is a "permitted amount" for refurbishment? The permitted amount is £10,000 or 5% of the property's purchase price (whichever is greater), up to a maximum of £20,000. See Schedule 6A, paragraph 7(4)-(7) below
What counts as "refurbishment"? Refurbishment means works that enhance or are intended to enhance the value of the dwelling. It does not include basic cleaning or works required solely to meet minimum safety standards. See Schedule 6A, paragraph 7(8) below
What is a "property trader"? A company, limited liability partnership, or partnership whose members are all either companies or LLPs, that carries on the business of buying and selling dwellings. See Schedule 6A, paragraph 7(9) below
What is the "permitted area"? Land up to 0.5 hectares (approximately 1.24 acres or 5,000 square meters) including the house itself, or a larger area if reasonably required for the enjoyment of that specific dwelling given its size and character. See Schedule 6A, paragraph 7(3) below
When can relief be withdrawn? Relief can be withdrawn if the property trader later breaches the conditions, for example by spending more than the permitted amount on refurbishment or allowing employees to occupy the property. See conditions in paragraphs 2(2)(d), 3(2)(c), 4(2)(c), and 6(2)(e) below
HMRC Enquiries and Property Trader Relief
Stamp Duty Land Tax (SDLT) relief under Schedule 6A of the Finance Act 2003 offers exemptions for certain acquisitions by property traders. However, like any form of tax relief, it is subject to scrutiny by HM Revenue and Customs (HMRC). Understanding the enquiry and assessment powers of HMRC is essential for any trader relying on this relief.
1. The Standard Enquiry Window
Where a trader claims Property Trader Relief on an SDLT return, HMRC has nine months from the effective date of the transaction to open an enquiry under paragraph 12 of Schedule 10 to the Finance Act 2003. This nine-month period is the standard statutory window during which HMRC may raise questions, request documents, or investigate whether the relief was properly claimed.
If no enquiry is opened within this period, the return is generally treated as final, subject to the exception of discovery assessments (explained below).
2. Discovery Assessments: Beyond the Nine-Month Period
Even after the nine-month enquiry window closes, HMRC may still raise a discovery assessment under paragraph 25 of Schedule 10, if they find that too little tax has been paid due to:
- Carelessness, or
- Deliberate behaviour (i.e. fraud or dishonesty)
This means if a trader has claimed the relief but failed to meet the statutory conditions—such as by exceeding the permitted refurbishment budget, letting out the property, or occupying it personally—and attempted to conceal that fact, HMRC may assess the tax retrospectively. Discovery assessments can reach back up to:
- 4 years for standard errors,
- 6 years for careless errors, and
- 20 years for deliberate misstatements or fraud.
These powers are especially relevant where HMRC believes that the relief was wrongly claimed and the trader did not disclose all relevant information.
3. Withdrawal of Relief
Under paragraph 11 of Schedule 6A, relief is withdrawn automatically if the trader breaches certain post-acquisition conditions, including:
- Spending more than the permitted amount on refurbishment (generally capped at £20,000),
- Letting or licensing the property (except short-term back-to-back lets to the seller),
- Occupation by directors, employees, or connected persons.
Where relief is withdrawn, SDLT becomes chargeable as if no relief had ever been claimed, and interest and penalties may apply.
4. Risk and Compliance Implications
Property traders claiming relief should retain records showing:
- The intention and conduct at the time of acquisition,
- Post-acquisition use and expenditure,
- All communications and contracts with vendors.
In the event of an enquiry or a discovery assessment, these records will form the basis of the defence. Traders are strongly advised to act transparently and ensure full compliance with the conditions of relief.
Schedule 6A, Finance Act 2003: Relief for certain acquisitions of residential property
This is an extract of the legislation for reference purposes. Always refer to the official legislation for the most up-to-date and complete version.
Paragraph 1: Acquisition by house-building company from individual acquiring new dwelling
1(1) Where a dwelling ("the old dwelling") is acquired by a house-building company from an individual (whether alone or with other individuals), the acquisition is exempt from charge if the following conditions are met.
1(2) The conditions are— (a) that the individual (whether alone or with other individuals) acquires from the house-building company a new dwelling, (b) that the individual— (i) occupied the old dwelling as his only or main residence at some time in the period of two years ending with the date of its acquisition, and (ii) intends to occupy the new dwelling as his only or main residence, (c) that each acquisition is entered into in consideration of the other, and (d) that the area of land acquired by the house-building company does not exceed the permitted area.
Plain English Explanation
A house-building company doesn't have to pay SDLT when buying a property from an individual if:
- The individual is buying a new dwelling from the same company
- The individual lived in the old property as their main home within the last 2 years
- The individual intends to use the new dwelling as their main home
- The deals are part of the same arrangement
- The land being acquired doesn't exceed the "permitted area" (generally 0.5 hectares unless more is reasonably needed)
Paragraph 2: Acquisition by property trader from individual acquiring new dwelling
2(1) Where a dwelling ("the old dwelling") is acquired by a property trader from an individual (whether alone or with other individuals), the acquisition is exempt from charge if the following conditions are met.
2(2) The conditions are— (a) that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from individuals who acquire new dwellings from house-building companies, (b) that the individual (whether alone or with other individuals) acquires a new dwelling from a house-building company, (c) that the individual— (i) occupied the old dwelling as his only or main residence at some time in the period of two years ending with the date of its acquisition, and (ii) intends to occupy the new dwelling as his only or main residence, (d) that the property trader does not intend— (i) to spend more than the permitted amount on refurbishment of the old dwelling, or (ii) to grant a lease or licence of the old dwelling, or (iii) to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling, and (e) that the area of land acquired by the property trader does not exceed the permitted area.
Plain English Explanation
A property trader doesn't have to pay SDLT when buying a property from an individual if:
- The trader is in the business of buying homes from people who are buying new homes from house-builders
- The individual is buying a new dwelling from a house-building company
- The individual lived in the old property as their main home within the last 2 years
- The individual intends to use the new dwelling as their main home
- The property trader doesn't plan to spend too much on refurbishment, rent it out (except back to the individual for up to 6 months), or allow their staff to live in it
- The land being acquired doesn't exceed the "permitted area"
Paragraph 3: Acquisition by property trader from personal representatives
3(1) Where a dwelling is acquired by a property trader from the personal representatives of a deceased individual, the acquisition is exempt from charge if the following conditions are met.
3(2) The conditions are— (a) that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from personal representatives of deceased individuals, (b) that the deceased individual occupied the dwelling as his only or main residence at some time in the period of two years ending with the date of his death, (c) that the property trader does not intend— (i) to spend more than the permitted amount on refurbishment of the dwelling, or (ii) to grant a lease or licence of the dwelling, or (iii) to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the dwelling, and (d) that the area of land acquired does not exceed the permitted area.
Plain English Explanation
A property trader doesn't have to pay SDLT when buying a property from the personal representatives of someone who has died if:
- The trader is in the business of buying homes from the estates of deceased individuals
- The deceased person lived in the property as their main home within the last 2 years before their death
- The property trader doesn't plan to spend too much on refurbishment, rent it out, or allow their staff to live in it
- The land being acquired doesn't exceed the "permitted area"
Paragraph 4: Acquisition by property trader from individual where chain of transactions breaks down
4(1) Where a dwelling ("the old dwelling") is acquired by a property trader from an individual (whether alone or with other individuals), the acquisition is exempt from charge if— (a) the individual has made arrangements to sell a dwelling ("the old dwelling") and acquire another dwelling ("the second dwelling"), (b) the arrangements to sell the old dwelling fail, and (c) the acquisition of the old dwelling is made for the purpose of enabling the individual's acquisition of the second dwelling to proceed, and the following conditions are met.
4(2) The conditions are— (a) that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from individuals in those circumstances, (b) that the individual— (i) occupied the old dwelling as his only or main residence at some time in the period of two years ending with the date of its acquisition, and (ii) intends to occupy the second dwelling as his only or main residence, (c) that the property trader does not intend— (i) to spend more than the permitted amount on refurbishment of the old dwelling, or (ii) to grant a lease or licence of the old dwelling, or (iii) to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the old dwelling, and (d) that the area of land acquired does not exceed the permitted area.
Plain English Explanation
A property trader doesn't have to pay SDLT when buying a property from an individual whose property chain has broken down if:
- The trader is in the business of buying homes from people in property chains that have broken down
- The individual was trying to sell their old home and buy a new one, but the sale fell through
- The trader is buying the property specifically to help the individual complete the purchase of their new property
- The individual lived in the old property as their main home within the last 2 years
- The individual intends to use their second/new dwelling as their main home
- The property trader doesn't plan to spend too much on refurbishment, rent it out (except back to the individual for up to 6 months), or allow their staff to live in it
- The land being acquired doesn't exceed the "permitted area"
Paragraph 5: Acquisition by employer in case of relocation of employment
5(1) Where a dwelling is acquired from an individual (whether alone or with other individuals) by his employer, the acquisition is exempt from charge if the following conditions are met.
5(2) The conditions are— (a) that the individual occupied the dwelling as his only or main residence at some time in the period of two years ending with the date of the acquisition, (b) that the acquisition is made in connection with a change of residence by the individual resulting from relocation of employment, (c) that the consideration for the acquisition does not exceed the market value of the dwelling, and (d) that the area of land acquired does not exceed the permitted area.
Plain English Explanation
An employer doesn't have to pay SDLT when buying a property from an employee who is relocating for work if:
- The employee lived in the property as their main home within the last 2 years
- The purchase is directly related to the employee moving for work (either joining the company, changing role, or changing their place of work)
- The employer isn't paying more than market value for the property
- The move is necessary because the old home isn't within reasonable commuting distance of the new workplace
- The land being acquired doesn't exceed the "permitted area"
Paragraph 6: Acquisition by property trader in case of relocation of employment
6(1) Where a dwelling is acquired by a property trader from an individual (whether alone or with other individuals), the acquisition is exempt from charge if the following conditions are met.
6(2) The conditions are— (a) that the acquisition is made in the course of a business that consists of or includes acquiring dwellings from individuals in connection with a change of residence resulting from relocation of employment, (b) that the individual occupied the dwelling as his only or main residence at some time in the period of two years ending with the date of the acquisition, (c) that the acquisition is made in connection with a change of residence by the individual resulting from relocation of employment, (d) that the consideration for the acquisition does not exceed the market value of the dwelling, (e) that the property trader does not intend— (i) to spend more than the permitted amount on refurbishment of the dwelling, or (ii) to grant a lease or licence of the dwelling, or (iii) to permit any of its principals or employees (or any person connected with any of its principals or employees) to occupy the dwelling, and (f) that the area of land acquired does not exceed the permitted area.
Plain English Explanation
A property trader doesn't have to pay SDLT when buying a property from an individual who is relocating for work if:
- The trader is in the business of buying homes from people who are relocating for work
- The individual lived in the property as their main home within the last 2 years
- The purchase is directly related to the individual moving for work
- The trader isn't paying more than market value for the property
- The move is necessary because the old home isn't within reasonable commuting distance of the new workplace
- The property trader doesn't plan to spend too much on refurbishment, rent it out (except back to the individual for up to 6 months), or allow their staff to live in it
- The land being acquired doesn't exceed the "permitted area"
Paragraph 7: Meaning of "dwelling", "new dwelling" and "the permitted area"
7(1) "Dwelling" includes land occupied and enjoyed with the dwelling as its garden or grounds.
7(2) A building or part of a building is a "new dwelling" if— (a) it has been constructed for use as a single dwelling and has not previously been occupied, or (b) it has been adapted for use as a single dwelling and has not been occupied since its adaptation.
7(3) "The permitted area", in relation to a dwelling, means land occupied and enjoyed with the dwelling as its garden or grounds that does not exceed— (a) an area (inclusive of the site of the dwelling) of 0.5 of a hectare, or (b) such larger area as is required for the reasonable enjoyment of the dwelling as a dwelling having regard to its size and character.
Plain English Explanation
This section defines key terms:
- A "dwelling" includes its garden and grounds
- A "new dwelling" is either newly built and never occupied, or newly converted and never occupied since conversion
- The "permitted area" is normally up to 0.5 hectares (including the house), but can be larger if reasonably needed for a property of that size and character



