The Renters’ Rights Act 2025 (RRA 2025) shakes up the traditional structure of residential tenancies – fixed-term assured shorthold tenancies will be abolished and home rentals must instead take place as assured periodic tenancies (APTs) from 1 May 2026.

One elusive but significant consequence of this arises from the interaction between the new tenancy model and the existing Stamp Duty Land Tax (SDLT) regime.

However, what looks like just a shift in tenancy structure could, in practice, pull thousands of renters into scope of SDLT reporting and payment obligations for the first time.

From ASTs to APTs – A Recap

Under the Act, new residential tenancies must take the form of an APT rather than an AST. This means (as covered in depth in our previous articles on RRA 2025):

· Tenancies continue indefinitely unless terminated by notice (2 months for tenants; 4 months for landlords plus a valid statutory ground for eviction);

· Fixed terms will no longer be allowed except for in certain leases (e.g. student accommodation);

· All existing residential ASTs will convert automatically into assured periodic tenancies upon expiry of their contractual fixed term.

SDLT on rent: the current position

SDLT is payable not only on the purchase of property but also on the rental element of leases. For short-term tenancies, SDLT is calculated on the Net Present Value (NPV), i.e. the rent payable over the defined term.

The first £125,000 of NPV is taxed at 0%, and any amount above that threshold is taxed at 1%. The majority of residential tenancies have historically fallen below the threshold.

ASTs have generally been short – between 6 and 12 months long. When an AST is renewed, this is generally treated as a separate lease for NPV purposes and so rent would have to be extremely high to hit the threshold within one fixed term – which is rare for the average residential tenancy.

Why periodic tenancies change the SDLT landscape

Under an APT, the tenancy continues indefinitely until terminated by landlord or tenant.

Since the NPV increases each year the tenancy continues and the SDLT calculation must be revisited annually, this means that more residential tenancies may exceed the £125,000 threshold within a few years of the new system taking effect.

This is not due to any change in SDLT legislation, but rather the removal of fixed terms, which previously prevented most residential leases from accumulating sufficient NPV to trigger SDLT charges.

Filing obligations

For SDLT-paying tenants, an SDLT return must be filed within 14 days of the liability arising, and after that within 30 days after subsequent annual recalculations.

With penalties for late filing falling between £100 and £200, this consequence of abolishing ASTs represents a significant administrative burden for residential tenants who have never previously been required to engage with SDLT in this way.

There is currently no indication that the government intends to amend the SDLT rules to prevent this outcome.

Final thoughts

Unless the government intervenes, tenants staying in the same property for several years under the new APT setup could end up triggering SDLT payment and reporting obligations.

To avoid any surprises, it’s worth seeking advice from an accountant or tax adviser to avoid being hit with late fees for new SDLT charges.