Student accommodation | an SDLT efficient investment?

*Article updated: 20 May 2025

Stamp Duty Land Tax (SDLT) can add considerable cost to the purchase of an investment property, so investors are wise to look out for opportunities to make savings.

Student accommodation comes in several different forms, for example – halls of residence, purpose-built student flats or HMOs which are occupied solely by students. Depending on the nature of the interest being purchased it may be possible to take advantage of an exemption from the higher rates (5%, previously 3%, surcharge) for additional dwellings (if the type of student property can be classed as “institutional accommodation” for SDLT purposes) or apply the non-residential rates of SDLT if the property consists of 6 or more individual dwellings.

Looking at some numbers, if a student accommodation building was purchased by a company which is UK resident for SDLT purposes for £1,000,000, the SDLT liability could be:

• £93,750, if the building doesn’t qualify as institutional accommodation
• £43,750 if it does qualify as institutional accommodation
• £39,500 if it consists of 6 separate dwellings

As you can see from above, several possibilities need to be explored to establish the best SDLT outcome. There are subtleties to what can qualify as “institutional accommodation” and what is defined as a “separate dwelling”, as both will depend on the facts for each property.

The residential band nil band is expected to fall back to £125,000 from 1 April 2025, so residential SDLT costs will be higher.

For more information please contact Sarah Davis or Judith Pederzolli.

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