Annual tax on enveloped dwellings – does it apply to your company?

Does your company own a residential property valued over £500,000? If so, you might need to pay an annual tax on it.

This tax applies if the property is used as the business owner's primary residence, even if they pay market rent. This includes holiday homes and second homes, with very few exceptions.

Even if the property is residential, an investment, commercially let or intended for development and valued over £500,000 as of 1 April 2022, you'll need to file a return every year by 1 April. You may be eligible for relief on the tax, but filing a return is essential to avoid penalties.

The minimum annual tax is £4,400 for properties valued between £500,000 and £1 million, and it increases with higher property values – see below.

If you have any questions about your situation, please get in touch with us.