SDLTM00377 | Scope: what is chargeable: land transactions: residential property: treatment of student accommodation

Student accommodation can take a variety of forms and whether or not a building is a hall of residence for this purpose will depend on the character of the accommodation provided. By virtue of FA03/S116(6) all references to a building should be read to include part of a building.

These can be separated into three broad categories:

1. Student halls of residence, which are buildings owned or managed by the educational establishments that the students in those buildings attend. These will be traditional ‘halls’ buildings that often sit on the campus of the educational establishment, or close to it, and students can only live in the building if they attend the educational establishment in question. These properties are subject to the non-residential rates of SDLT and are therefore also outside the scope of the Higher Rates for Additional Dwellings (“HRAD”) and Multiple Dwellings Relief (“MDR”) (MDR abolished with effect from 1 June 2024, see SDLTM29901)

2. Residential accommodation for students other than student halls of residence, such as the type of properties owned by companies that specialise in the provision of student accommodation, are, while aimed at the student market, not owned by, or involved with, the educational establishments that the students in these buildings attend. There will still be an obligation for all residents to be students, which would be expected to be able to be evidenced through a restriction in the permitted planning use. These properties are subject to the residential rates of SDLT, but not HRAD. There is also the possibility for MDR to apply to transactions prior to 1 June 2024 as explained below.

3. ‘Ordinary’ residential accommodation which happens to be let to or otherwise used by students, including properties which may be regarded as Houses of Multiple Occupancy (say in a student village in close proximity to an educational establishment). In contrast with category 2, there is no obligation for the residents to be students. These properties follow the same SDLT treatment as any other residential property. HRAD and/or MDR (for transactions prior to 1 June 2024) may apply.

A building which is simply described as a student hall of residence will not necessarily be treated as such for SDLT purposes.

To qualify as a student hall of residence (category 1), HMRC will expect evidence that the accommodation is limited to students and staff of a particular educational institution and that the institution is involved in placing its students in the building. For category 2, there should be evidence that the accommodation is restricted to students (regardless of the educational institution they attend).

As a hall of residence is not treated as a dwelling for SDLT purposes (section 116(2)-(3)), MDR could not be claimed, even prior to its abolition. Where student accommodation is not a hall of residence (i.e. it falls within categories 2 and 3), relief will be available in respect of units of accommodation which meet the normal criteria of suitability for residential use as a single dwelling.

Prior to the abolition of MDR, it was the purchaser's choice whether to claim MDR or to apply FA03 S116(7), whereby the purchase of six or more dwellings in a single transaction was treated as a non-residential transaction for the purposes of SDLT. Where MDR is no longer available there is no longer a choice.

Where there is a purchase of six or more dwellings in a single transaction, FA03 s116(7) will apply to treat the transaction as non-residential (see SDLTM00365).

Examples are provided on the next page (SDLTM00377A).