ATED Explained: Annual Tax on Enveloped Dwellings 2026/27

Last updated 24 June 2026 · 10 min read · By the LandlordTaxAi Editorial Team

The short answer

ATED is an annual charge on companies that own a UK home worth more than £500,000. The 2026/27 charges start at £4,600. The return is due by 30 April — at the start of the year, not the end. But if you genuinely let the property to third parties, a relief usually cuts the charge to £0 — provided you still file the return to claim it.

ATED — the Annual Tax on Enveloped Dwellings — is one of the most misunderstood taxes in property. The name scares people, the charges look enormous, and the deadline lands at an odd time. Yet for most company landlords the real bill is nil. The danger is not the tax — it is forgetting to file the return that proves you do not owe it. If you are weighing up holding property through a company, read this alongside our limited company vs personal buy-to-let guide.

Who is actually caught by ATED?

ATED only bites when a UK dwelling worth more than £500,000 is “enveloped” — held inside a corporate wrapper rather than owned personally. You are in scope if the owner is a:

company (UK or non-UK)
partnership with at least one corporate partner
collective investment scheme, such as a unit trust or open-ended investment vehicle

If you own your buy-to-let in your own name, ATED is irrelevant — skip the rest of this guide. ATED is purely a charge on residential property held in a company.

ATED charges for 2026/27

The charge is a fixed amount per value band — not a percentage — for the chargeable period 1 April 2026 to 31 March 2027:

Property value	Annual charge 2026/27
More than £500,000 up to £1 million	£4,600
More than £1 million up to £2 million	£9,450
More than £2 million up to £5 million	£32,200
More than £5 million up to £10 million	£75,450
More than £10 million up to £20 million	£151,450
More than £20 million	£303,450

The band is set by the property’s value on the relevant valuation date — currently 1 April 2022 for anything you owned then. If your valuation is within 10% of a threshold, you can ask HMRC for a free pre-return banding check rather than risk landing in the wrong band.

The relief that wipes most bills to nil

If your company’s dwelling is let on a commercial basis to unconnected third parties, the property rental business relief usually reduces the ATED charge to nil. The same applies to property developers and traders holding stock. But the relief is not automatic — you must file a Relief Declaration Return to claim it. Miss the filing and HMRC can charge late-filing penalties even though no tax was ever due.

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Estimate the tax on your rental income for 2026/27

Annual rental income

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Result

Taxable profit (rent − expenses): £11,200
Income Tax at 40%: £4,480
Less mortgage interest credit (20%): − £1,000
Tax due on this property: £3,480
Income after tax: £7,720

Estimate based on verified 2026/27 UK rates. Informational only — not personal tax advice.

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How to handle ATED, step by step

1
Check whether your property is in scope
ATED applies if a company, a partnership with a corporate partner, or a collective investment scheme owns a UK dwelling worth more than £500,000 on the relevant valuation date. If you own the property personally, ATED never applies.
2
Value the property on the right date
Use the 1 April 2022 valuation if you owned it on or before that date, or the acquisition date if you bought it later. Properties are revalued every five years, so the 1 April 2022 value covers the 2023/24 to 2027/28 periods.
3
Register for the ATED online service
If you have not used ATED before, register for the ATED online service with HMRC. You can also appoint an agent to file on your behalf through the same service.
4
Decide if a relief reduces your charge to nil
If the dwelling is let commercially to unconnected third parties, or held by a property developer or trader, a relief can reduce the charge to nil. You still must file — a Relief Declaration Return — to claim it.
5
File by 30 April and pay anything due
Submit your return by 30 April for a property in scope on 1 April, or within 30 days of acquisition for a new purchase. Pay any charge by the same deadline to avoid penalties and interest.

The deadline trap

ATED runs in advance. For a property in scope on 1 April, the return and payment are due by 30 April of the same year — you are paying for the year ahead, not the year just gone. Buy a qualifying property mid-year and you have just 30 days from acquisition to file. Treat ATED like a diary entry for the start of April, not something to leave until your accounts are done.

Frequently asked questions

Who has to pay ATED?

ATED is paid mainly by companies that own UK residential property worth more than £500,000. It also catches partnerships with at least one corporate partner and collective investment schemes. Individuals who own property in their own name are never within ATED — it is specifically a charge on residential property 'enveloped' inside a corporate wrapper.

What are the ATED charges for 2026/27?

For the chargeable period 1 April 2026 to 31 March 2027 the annual charges are: £4,600 for properties worth more than £500,000 up to £1 million; £9,450 up to £2 million; £32,200 up to £5 million; £75,450 up to £10 million; £151,450 up to £20 million; and £303,450 above £20 million. The charge is fixed per band, not a percentage of value.

When is the ATED return due?

For a property already within scope on 1 April, the return and payment are both due by 30 April — at the very start of the chargeable period, not the end. If a property comes into ATED during the year (for example you buy one), you must file within 30 days of acquisition (30 days, with payment within the same window). These early deadlines catch people out every year.

I rent my company's property out — do I still have to file?

Almost certainly yes. If the dwelling is let on a commercial basis to people who are not connected to the company, the 'property rental businesses' relief usually reduces the ATED charge to nil. But the relief is not automatic — you must file a Relief Declaration Return to claim it. Forget to file and HMRC can charge penalties even though no tax was actually due.

How often do I need to revalue the property?

Every five years. The current valuation date is 1 April 2022, which fixes the band for the 2023/24 through 2027/28 chargeable periods. The next revaluation date is 1 April 2027. If you acquired the property after 1 April 2022, you use the acquisition value until the next general revaluation. If your value is within 10% of a band threshold you can ask HMRC for a pre-return banding check.

Should I take my buy-to-let out of the company to avoid ATED?

Not on ATED grounds alone. For genuinely let property the relief removes the charge, so ATED is usually an annual filing chore rather than a real cost. The bigger decision — company versus personal ownership — turns on Section 24, Corporation Tax, dividend tax and the cost of extracting profit. ATED is one factor, not the deciding one.

Written and reviewed by the LandlordTaxAi Editorial Team. Our guides are reviewed against current HMRC guidance and updated when the rules change. Operated by LandlordTaxAi, United Kingdom. Follow us on LinkedIn.

Last reviewed: 24 June 2026 · Based on HMRC’s “Annual Tax on Enveloped Dwellings” guidance, including the 2026/27 chargeable amounts, the £500,000 threshold, the 30 April / 30-day filing deadlines and the reliefs and exemptions. This article is informational only and does not constitute tax advice. Check the latest details on GOV.UK or with a qualified accountant.