Specifically, the abolishment of Assured Shorthold Tenancies (ASTs) which are to be replaced with assured periodic tenancies from 1st May 2026 has been the subject of growing concern. This is because it raised the prospect that tenants could face SDLT liability and fall within the SDLT regime on the net present value (NPV) of rents. 

Although SDLT liability is most commonly associated with property purchases, it can also apply to leases, including SDLT on rent, measured by reference to the NPV payable over the term of the lease.

NPV is a way of calculating the value today of a series of future payments, taking into account that money now is worth more than money in the future due to inflation. 

Under existing SDLT legislation, leases with indefinite terms (including periodic leases) are treated as “growing leases”. In practice, this means:

• The tenant is required to recalculate the NPV of rent year by year
• If the cumulative rent exceeds SDLT thresholds, a charge and/or reporting obligation may arise
• Further SDLT returns may be required as the lease continues

Periodic assured tenancies, including the new section 4A tenancies, fall within this definition of indefinite leases.

For SDLT purposes, a periodic tenancy is treated as a series of one‑year leases, meaning SDLT becomes payable once the threshold is reached. After that point, a Land Transaction Return must be filed each year. 

On 22 April 2026, the Exchequer Secretary to the Treasury addressed these concerns in a statement confirming that the forthcoming Finance Bill 2027 will include legislation preventing SDLT liability from arising on the NPV of rents under assured periodic tenancies because of the RRA 2025 changes. Pending the new legislation, HMRC has also confirmed it will not collect SDLT on the rent element of these tenancies from their commencement.

This announcement brings reassurance and removes what had become a significant obstacle to the implementation of the RRA. 

If you are a landlord or tenant and require any guidance on the Renters’ Rights Act, please get in touch with our specialist property disputes team. Well-versed in the upcoming changes, our experienced team can guide you through the changes and answer any questions you may have. For more information, please If you require contact Fiona Hannaford on 01803 408410 and [email protected]