Independent students could be left in limbo under Renters’ Rights Act
3 months ago | 1 comments
Tenants face stamp duty bills under periodic tenancies – Financial Times
9:41 AM, 2nd February 2026, 3 months ago
12
The government is apparently working on a fix to an anomaly in the Renters’ Rights Act that could see huge numbers of tenants paying stamp duty.
According to the Financial Times, under current tax rules, an indefinite or periodic tenancy requires a stamp duty land tax calculation each year.
Liability is triggered once cumulative rent paid reaches £125,000, at which point tax becomes due.
To illustrate the point, the newspaper highlights a student let in London with eight friends paying £1,000 a month. That would equate to £96,000 annually and under the Act, the students would be a facing a stamp duty bill of £573 just after a year.
Tenants will face the bill from May when assured shorthold tenancies are scrapped and replaced with periodic tenancies.
Stamp duty on leases
The Financial Times reports that around 150,000 private renting households could fall within scope within three years, rising to 250,000 by 2031 as tenancies roll on.
Stamp duty on leases is charged at 1% of the net present value of rent above the £125,000 threshold.
While the sums involved are usually small, the administrative burden is not.
Tenants would need to calculate and submit returns annually; a process the paper says they are likely to expect or understand.
Tenants will need to file a return
Tenants will also need to know that late filing attracts an automatic £100 penalty, rising to £200 after three months.
However, reaching the stamp duty threshold would take time for most renters.
The average London tenant would need around six years of occupation before cumulative rent hits £125,000.
Periodic tenancies could be liable
A government official confirmed to the FT that newly defined periodic tenancies could become liable but said the vast majority of private tenants would never reach that point.
The official added that where a lease is renewed following renegotiation, the term is treated as starting again, limiting exposure.
They also said that any changes needed to ‘accommodate the new tenancy system’ would be announced in a Budget.
One option under consideration would be to delay filing and payment until the stamp duty due reaches £5,000.
That would restrict liability to high-value properties after many years of occupation.
A government spokesperson told the FT: “The department is aware of the potential issue, and we are looking at how best to resolve [it].
“It is not an immediate problem for any tenant.
“No one will be affected until the rent they are paying is worth more than £125,000 — which would take most tenants more than seven years.”
Tags:
periodic tenancies, private rented sector England, rental law reform UK, Renters’ Rights Act, stamp duty tenants, tenant tax rules
Comments
Have Your Say
Every day, landlords who want to influence policy and share real-world experience add their voice here. Your perspective helps keep the debate balanced.
Not a member yet? Join In Seconds
Login with
or
Previous Article
Selling a HMO property with tenant in arrears?Related Articles
Government funds Shelter to promote Renters’ Rights Act to tenants
3 months ago | 7 comments
Renters’ Rights Act depends on council enforcement claims tenant group
3 months ago | 1 comments
Member Since April 2018 - Comments: 374
10:06 AM, 2nd February 2026, About 3 months ago
Scammers
Member Since December 2025 - Comments: 49
10:07 AM, 2nd February 2026, About 3 months ago
Lazy journalism repeating a scare story about a legal issue govt aware of and will close. They have no intention to collect and an extra tax was not intention of t he legislation so it would be challenged v fast if they tried
Member Since May 2015 - Comments: 2203 - Articles: 2
10:28 AM, 2nd February 2026, About 3 months ago
I see no real problem in this, tenants will be charged stamp duty at the same rate as home owners. Welcome to the real financial world.
Member Since June 2015 - Comments: 333
11:24 AM, 2nd February 2026, About 3 months ago
This is something that has been written about several times over the last few years.
Has anyone ever paid it? Does anyone keep records long enough to know exactly what their position is? Doesn’t GDPR prevent landlords from keeping records for longer than necessary? It sounds like it is the tenants responsibility to keep track.
By my reckoning 3 of my UC tenants are probably getting close to needing to think about this. They’ve all been in their homes for several years and are probably between 18 months and 3 years from hitting the £125K. At £800 per month it takes about 13 years to get there. Obviously their rent was a bit lower initially, so maybe it will take 15 or 16 years. One of them has had the same tenancy agreement since 2011.
It’s not something that is likely to affect high income, highly mobile tenants as they move too often, but it will affect low income tenants who tend to stay put for a very long time.
Outside London many of us have let ASTs roll onto periodic tenancies for decades.
Member Since December 2023 - Comments: 1587
11:51 AM, 2nd February 2026, About 3 months ago
It’s not a new issue. Just one that has been ignored.
If I have to pay SDLT when I need to move house, tenants SHOULD pay SDLT when they want to move house. Of course, neither of us should have to pay SDLT.
Member Since March 2023 - Comments: 1506
12:29 PM, 2nd February 2026, About 3 months ago
You couldn’t make it up could you. Needless to say the government have said they will make sure this doesn’t happen (perhaps they will make the landlord pay it – no no they couldn’t be that stupid .. could they) . Anyway this might just be the leverage to get the tenants to give notice so I can sell.
Member Since December 2023 - Comments: 1587
12:29 PM, 2nd February 2026, About 3 months ago
Reply to the comment left by GlanACC at 02/02/2026 – 12:29
Never underestimate a politician.
Member Since August 2016 - Comments: 508
1:17 PM, 2nd February 2026, About 3 months ago
Is this real?
Will it cost more to chase, identify and collect than the received money?
Madness?
Member Since March 2023 - Comments: 1506
1:21 PM, 2nd February 2026, About 3 months ago
Reply to the comment left by Blodwyn at 02/02/2026 – 13:17
It IS real, but the government have realised the cock up and said they will change things so that it doesn’t apply to private rentals
Member Since January 2015 - Comments: 1447 - Articles: 1
1:01 AM, 3rd February 2026, About 3 months ago
Crap drafting and worse proofing.
Am I surprised? No