Answers · UK 2025/26
What SDLT rate applies to mixed-use properties in the UK?
Mixed-use property is charged at non-residential SDLT rates: 0% up to GBP 150,000, 2% on GBP 150,001-GBP 250,000, and 5% above GBP 250,000. No 3%/5% residential surcharge applies. This is often cheaper than residential rates. HMRC scrutinises mixed-use claims -- commercial use must be genuine and substantial.
Full answer
Mixed-use property (a property that includes both residential and commercial elements) is subject to non-residential (commercial) SDLT rates, which are generally lower than residential rates -- especially for higher-value purchases or where the 3% additional-dwelling surcharge would otherwise apply. Non-residential SDLT rates (2026/27) -- GBP 0 - GBP 150,000: 0% -- GBP 150,001 - GBP 250,000: 2% -- Above GBP 250,000: 5% Comparison with residential (no surcharge) -- GBP 0 - GBP 125,000: 0% -- GBP 125,001 - GBP 250,000: 2% -- GBP 250,001 - GBP 925,000: 5% For a GBP 500,000 purchase: -- Mixed-use/commercial: GBP 0 + GBP 2,000 + GBP 12,500 = GBP 14,500 -- Residential (main home): GBP 0 + GBP 2,500 + GBP 12,500 = GBP 15,000 -- Residential with 5% surcharge (e.g., additional home): GBP 25,000 + GBP 15,000 = GBP 40,000 The saving is most dramatic where the buyer would otherwise pay the 5% surcharge -- a GBP 500,000 additional residential property purchase saves approximately GBP 25,500 if categorised as mixed-use. What qualifies as mixed-use? -- Shop with a flat above -- Farm with farmhouse and agricultural land -- Pub with landlord's accommodation -- Office building with a residential caretaker flat -- A property partially used as a surgery or dental practice HMRC scrutiny HMRC has challenged mixed-use claims aggressively, particularly: -- Properties where the commercial element is trivial (e.g., a small paddock or garage attached to a residential property) -- Properties where the commercial use has ceased before purchase -- Agricultural land where the buyer has no farming intention Garages, paddocks, and garden areas are generally NOT sufficient to make a property mixed-use without clear, active commercial activity. Multiple Dwellings Relief (MDR) MDR was abolished on 1 June 2024. Mixed-use classification remains the main remaining SDLT mitigation strategy for unusual residential purchases.
More answers
This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.