Stamp Duty Land Tax: Periodic Tenancies

Dan Tomlinson Excerpts

Wednesday 22nd April 2026 Written Statements

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

Tenant wellbeing is central to the Government’s recent Renters’ Rights Act 2025, which will deliver on our manifesto commitment to transform the experience of private renting and give renters much greater security and stability so that they can stay in their homes for longer.

The Act will improve the current system for both the 11 million private renters and the 2.3 million landlords in England. It will give renters much greater security and stability so that they can stay in their homes for longer, build lives in their communities, and avoid the risk of homelessness.

The Government are today setting out our intention to ensure that no one is newly brought into stamp duty land tax as a result of the changes in the Renters’ Rights Act.

Although most people understand how SDLT applies when related to the change of ownership of a property, it is also charged on some rents when their net present value exceeds £125,000. In practice, the vast majority of private tenants do not reach the SDLT threshold of £125,000 and so do not pay SDLT on their rent. This is because assured shorthold tenancies, which make up the majority of private tenancies, are likely to renew regularly, so the net present value of the rent is calculated over a relatively short duration.

From 1 May 2026, the Renters’ Rights Act will abolish fixed-term assured shorthold tenancies. Instead, all tenancies will be periodic, with tenants able to stay in their home until they decide to end the tenancy by giving two months’ notice. This will end the injustice of tenants being trapped paying rent for substandard properties and offer more flexibility to both parties to respond to changing circumstances.

Following this change, the net present value of rent under a continuing lease will be calculated assuming a lease that continues indefinitely. This means the net present value of the rent could increase and exceed the £125,000 threshold at which SDLT becomes payable, even though the underlying tenancy arrangements have not substantively changed.

The Government intend to legislate in the 2026-27 Finance Bill so that any residential lease that will be considered an assured tenancy under the Housing Act 1988, as amended by the Renters’ Rights Act, will not give rise to a SDLT charge on the rent element. The Government will set out the detail of this legislation at or before this year’s Budget.

The legislation will apply retrospectively from the date on which existing tenancies become section 4A assured tenancies—as defined in section 146 of the Renters’ Rights Act), which is expected to be on 1 May 2026.

HM Revenue and Customs will not collect any SDLT on the rent element of an assured tenancy from that date until the date the legislation takes overriding effect.

This measure ensures that tenants and landlords are not adversely affected by technical interactions between the Renters Rights Act and SDLT legislation, and reflects the Government’s commitment to the smooth and fair implementation of reforms to the private rented sector.

[HCWS1535]