Annual tax on enveloped dwellings

Annual Tax on Enveloped Dwellings (ATED) is a yearly charge levied on high-value residential properties in the UK owned by non-natural persons (NNPs). NNPs include companies, partnerships with at least one corporate member, and collective investment schemes.

Who needs to pay ATED?

ATED applies if all three conditions below are met:

1. The property is owned, or partly owned, by an NNP.
2. The property is a dwelling or a part of a building used as a dwelling.
3. The property value exceeds £500,000.

How much is ATED?

For the 2025/26 tax year, the ATED rates will be:

Potential reliefs:

You may be able to claim relief for your property if it falls under any of the following categories:

• Let to a third party on an arm’s length commercial basis.
• Open to the public for at least 28 days a year.
• Being developed for resale by a property developer.
• Owned by a property trader as the stock of the business for the sole purpose of resale.
• Being used by a trading business to provide living accommodations to certain employees.
• A farmhouse occupied by a farm worker or former long-serving farm worker.
• Owned by a registered provider of social housing or a qualifying housing co-operative.
• There are also exemptions for charitable companies (using the dwelling for charitable purposes), public bodies and bodies established for national purposes.

How often is the property value assessed?

ATED property values are revalued every five years. The most recent revaluation date was 1 April  2022, and the next one will be on 1 April 2027.

When to submit ATED return?

Returns must be submitted by 30 April at the start of the tax year that they relate, or within 30 days of acquiring the property.  If the property is a newbuild the reporting deadline is 90 days from the date of completion of the development.

Even if there is no ATED to pay, as the charge is fully covered by a relief, an ATED return still needs to be filed to avoid penalties arising.

When to pay the ATED charge

Any ATED charge needs to be paid at the same time as the return filing deadlines above.

What should you do?

If a company or other NNP will or has purchased a residential property, speak to one of Ballards property tax experts to assess your position.

Ballards property team has extensive experience acting for property-related businesses and can assist investors, developers, and associated trades with all financial property matters, including tax-efficient structuring, SDLT planning, Annual Tax on Enveloped Dwellings planning and reporting, and any other financial matters associated with property ownership. We act for all sizes of businesses.

If you would like to find out how we can help, don’t hesitate to get in touch with Martin Adams, Tax Partner at martin.adams@ballardsllp.com or call 01905 794 504.

Disclaimer. This article has been prepared for information purposes only. Formal professional advice is strongly recommended before making decisions on the topics discussed in this release.