SDLT Rule Changes: What Property Owners in the Tourism Industry Need to Know

From 1 April 2025, revised Stamp Duty Land Tax (SDLT) thresholds came into effect in England - bringing important changes for tourism property owners. If your business holds or acquires residential accommodation, you’ll now be paying more tax than you would have under the previous rules.

For tourism operators with assets like holiday cottages, serviced accommodation or B&B portfolios, these updates affect the cost of expansion, ownership restructuring, and long-term investment planning.

Let’s look at what’s changed when it comes to SDLT rules, and what actions you can do to minimise the impact. 

What’s Changed?

The SDLT nil‑rate band for residential property purchases has now dropped from £250,000 to £125,000. That means:

• The first £125,000 of the purchase price remains tax-free
• The portion between £125,001 and £250,000 is now taxed at 2%
• Higher bands remain unchanged (5% from £250,001 to £925,000, etc.)

So if you buy a property for £250,000, you now pay £2,500 in SDLT. Under the previous rules, there would have been no tax at all on that purchase.

For those acquiring multiple properties or operating across several sites, this adds up quickly.

Source: Gov.UK SDLT Residential Property Rates

Who’s Affected?

The changes impact all purchases of residential property in England, including:

• Furnished holiday lets (FHLs)
• Serviced apartments
• Guesthouses and B&Bs classed as dwellings
• Additional residential properties purchased by companies

Properties owned for tourism purposes but classified as residential dwellings for SDLT purposes are now subject to these revised thresholds.

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The SDLT Surcharge Still Applies for Additional Properties

If you already own residential property personally and purchase another, the SDLT surcharge continues to apply. This is applied in addition to the basic rate of SDLT. The surcharge increased to 5% in October 2024, for anyone purchasing an additional residential property:

For many businesses using property in the tourism sector, this is a crucial factor to include in costings.

Use the SDLT calculator on the Gov.UK website for a more detailed overview of what you could owe.

Do These Changes Affect Commercial Property?

No. The SDLT changes introduced in April 2025 only apply to residential properties. If your tourism business is buying or owns commercial premises - such as hotels, guesthouses with commercial use, booking offices or mixed-use sites - the residential SDLT thresholds and surcharges do not apply.

Instead, commercial or mixed-use properties follow a separate SDLT structure:

• 0% on the first £150,000
• 2% from £150,001 to £250,000
• 5% above £250,000

Also, the 3% surcharge for additional dwellings does not apply to commercial purchases.

However, some tourism properties sit in a grey area. For example, large holiday complexes or B&Bs with shared facilities might qualify as mixed-use, potentially reducing your SDLT bill. We have outlined some of the other potential SDLT savings property owners may want to consider below:

How to Maximise SDLT Reliefs

Even with the tighter thresholds now in force, there are still a number of reliefs and strategies that may help reduce your SDLT exposure.

1. Six or More Dwellings Rule

If you're buying six or more residential units in a single transaction - such as a collection of cottages or serviced flats - you may qualify for the non-residential SDLT rates, which are typically lower. This rule became more relevant after the end of Multiple Dwellings Relief in June 2024.

2. Group Relief

If you’re moving property between companies in the same corporate group, SDLT group relief may apply. This is especially useful during ownership restructuring. However, it only applies where ownership is not changing economically, and qualifying conditions must be met.

3. Mixed-Use Property Classification

If the property includes both residential and commercial use - such as a B&B with a café or an events space - it may qualify for mixed-use classification. This shifts the transaction to commercial SDLT rates, and avoids the 3% surcharge entirely.

4. Sub-Sale Relief

Where a buyer secures a land transaction but then assigns it to another party before completion, Sub-Sale Relief can apply. This prevents SDLT being paid twice. It’s useful in scenarios involving planning permission or where an intermediary is used.

5. Relief from the 15% Surcharge for Companies

Companies purchasing residential property over £500,000 may be hit with a 15% SDLT rate. However, relief may be available if:

• The property is let to the public
• Used as part of a hotel or holiday rental business
• Houses employees of the business
• Is part of a property development or trading activity

Tourism operators purchasing high-value dwellings should check if this relief applies.

6. Chain Breaker Relief (for Developers)

If you’re part-exchanging homes with customers - such as taking in a property from a customer buying a new build unit - Chain Breaker Relief can exempt the part-exchange property from SDLT, provided it was the vendor’s main residence.

7. Consider Leasehold or Management Models

If a full freehold purchase is too costly upfront, consider entering into a long-term leasehold or a management agreement. For example, a 99-year lease may trigger lower SDLT than a freehold, and management contracts often avoid SDLT entirely. This approach can be especially useful for seasonal or heritage sites.

8. Plan for SDLT in Future Acquisitions

Now that the lower nil-rate band is the new norm, SDLT planning by a specialist accountant should be part of your future property acquisitions. That includes:

• Upfront SDLT forecasting
• Structuring deals to optimise tax position
• Exploring group relief or partnership routes (where available)

Other Tax Changes Affecting Holiday Lets

Alongside the SDLT update, April 2025 also marked the end of the Furnished Holiday Let (FHL) tax regime. This removed several benefits for holiday property owners, including:

• Capital allowances on furnishings and equipment
• Full mortgage interest relief
• Access to Business Asset Disposal Relief (10% CGT)

This makes tax planning across income tax, SDLT and capital gains more important than ever.

We recently covered all this in more detail in our blog: Furnished Holiday Let Tax Changes – What You Need to Know.

Looking for Advice on Maximising SDLT Relief? We Can Help!

Now that the new SDLT rules are in place, it’s time to factor them into your acquisition plans, refinancing models and tax strategy.

At Linggard and Thomas, we work closely with commercial tourism businesses as well as holiday let and Airbnb owners to help them stay compliant, minimise tax liabilities, and make sound financial decisions. Whether you’re planning to buy, sell or restructure property holdings, we are able to advise on the best way you can maximise SDLT relief.

Get in touch today to see how we can empower your business to grow.

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