When people think about Stamp Duty relief, schemes like Group Relief between companies often come to mind. But there’s another useful – and often overlooked – exemption: the Property Trader Stamp Duty Exemption. This can provide a full exemption from Stamp Duty Land Tax (SDLT) when buying certain properties, as long as specific conditions are met.
In this blog, we’re focusing on how this exemption works when buying probate properties – that is, properties sold by the personal representatives (like executors) of someone who has passed away.
Who Can Qualify for the Property Trader Exemption?
To be eligible for this Stamp Duty exemption, you need to meet all the following criteria:
- The buyer must be a company (not an individual or sole trader), and that company’s business must include buying homes from the personal representatives of deceased individuals.
- The person who passed away must have lived in the home as their main or only residence at some point in the two years before they died.
- The total size of the land being bought – including the house and garden – must not be more than 10,000 square metres (about 2.5 acres).
If all three of these conditions are met, your company may qualify for full Stamp Duty exemption. If only the first two apply, you might still get partial relief, depending on the property.
Important: When the Exemption Can Be Lost
Even if you initially qualify, the exemption can be withdrawn, meaning you would have to pay the full Stamp Duty, if any of the following happen:
- You spend more than £20,000 on renovating the property.
- You rent out the property (by giving someone a lease or licence) instead of selling it or leaving it empty.
- You let anyone connected to your company (like directors, shareholders, or employees) live in the property.
This exemption is designed to encourage quick resale, not investment or rental use.
What Counts as “Refurbishment” vs “Safety Work”?
This is where things can get a little tricky.
The rules allow you to spend £10,000 (or 5% of the purchase price, if that is more, but never more than £20,000) on refurbishing the property. But works that are only essential safety repairs do not count towards this limit, as they are not regarded as refurbishments.
So if you’re replacing faulty electrics, unsafe heating systems, dangerous kitchen appliances, or fixing uneven floors, you may be able to spend more than the limit, but only on works that are essential to meet safety standards and do not upgrade the property any more than that.
That’s why it’s crucial to prepare a clear breakdown of planned works and estimated costs before you complete the purchase. This ensures you stay within the permitted spend and stay on the right side of the rules. We would always recommend getting expert advice on this to limit your risk.
HMRC Checks
Just like with any tax relief or exemption, HMRC can investigate and ask for proof. Having a detailed schedule of planned work (with clear explanations for safety-related items) will help defend your claim and avoid any unwanted surprises later.
Not Sure if You Qualify for Property Trader Stamp Duty Exemption?
Our commercial property team is here to help. We can guide you through whether a Property Trader Exemption or any other relief might apply to your transaction.
If you’re buying a probate property and think you might qualify, get in touch – we’ll be happy to talk it through and ensure you’re making the most of any available tax savings.
Contact us today to discuss your commercial property needs.
About the Author
Suzanne Day is a solicitor, specialising in Commercial Property. Based in Crystal Palace, Suzanne can advise and help you with land acquisition, auctions, business leases and licences, and more.
