Student Accommodation and SDLT Exemption

What is student accommodation?

There are three main categories which student accommodation can fall into. Depending on which category a property falls under will determine what SDLT the buyer is obliged to pay and what SDLT exemptions or relief is available.

Type One: Halls of Residence.

Halls of residence are owned by the educational institution for which the students living there attend. They are most commonly located on campus or are very close by.

Only students can live in this type of property if they attend the educational institution which owns it.

In order for a property to be classed as a halls of residence HMRC will require proof that only students or staff reside there and that the institution has control over who lives there.

Type Two: Residential Accommodation reserved for students.

This type of student accommodation is not involved with an educational institution but is often owned by a specialist property company who target the student market.

There is still an obligation for all residents to be students but they don’t have to all attend the same institution. HMRC will expect evidence that the occupiers are students.

Type Three: Standard Residential Accommodation.

Standard residential accommodation is normal accommodation which can be lived in regardless of student status. This type of student accommodation may be classed as a HMO (House of Multiple Occupancy) if for example they are located within or close to a student village.

Student accommodation exemption and multiple dwellings relief

In order for a student accommodation property to qualify for multiple dwellings relief (MDR) the property must consist of three or more self-contained units that are let to students under separate tenancy agreements. In addition, the property must be owned by a single entity or joint tenants.

 Type one properties (Halls of Residence) do not qualify for MDR as they are classified as non-residential property therefore non-residential rates of SDLT will apply.

Type two & three properties are subject to standard residential rates of SDLT but can claim MDR provided that they meet the criteria for doing so.

Get help with SDLT exemption

If you need help with getting an SDLT exemption for student accommodation investments, the Cap Ex Tax team can help you. With their guidance and expertise, you can ensure that your investment brings the highest possible returns.

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