Deadline nears for revaluation of residential property owned by companies

The HM Revenue and Customs (HMRC) has reminded businesses that they have only one month left to revalue the UK residential properties they own and tell the agency if any are worth more than £500,000.

Under the government’s Annual Tax on Enveloped Dwellings (ATED) rules companies must revalue UK residential properties every five years, and 2023 to 2024 is one of those years.

The revaluation can be done by the owner or by a professional valuer and must be based on the value of the property on 1 April 2022, or the date of acquisition if this was after 1 April 2022. This valuation sets the rate of annual payment until the next revaluation year.

Companies must submit their ATED return to HMRC and make any payments for the 2023 to 2024 period between 1 and 30 April 2023 or they could face a penalty.

“It is essential that companies act quickly to complete the revaluations of their residential property portfolios, however large or small, and pay what they owe,” Morris Graham, HMRC’s head of stamp taxes policy, said.

He urged the companies that are new to the ATED to familiarise themselves with the guidance on GOV.UK.

Once a property has been revalued, the annual charge is applicable for the next five years. The charge is dependent on the property’s value and starts at £4,150 for properties valued between £500,000 and £1 million.

This increases to £28,650 a year for properties valued between £2 million and £5 million, and £269,450 for properties worth more than £20 million. A full list of rates can be found on GOV.UK.

Companies that own residential properties in the UK, which were previously worth less than £500,000, should ensure they undertake a revaluation and notify HMRC by completing an ATED return if any of their properties now exceed the threshold.