The Annual Tax on Enveloped Dwellings (ATED) is a tax levied on UK residential properties valued at £500,000 or more, owned by companies or similar entities. Starting from April 2025, there will be an increase in ATED charges, reflecting adjustments to tax rates.
By Mark Duddridge – Senior Tax Manager
What is ATED?
Introduced in 2013, ATED aims to discourage the ownership of high-value residential properties through corporate structures. It applies to properties used as dwellings, such as houses or flats, and includes associated grounds and buildings. Certain properties, like hotels and student accommodations, are exempt.
Why the Increase?
The increase in ATED charges aligns with the revaluation of properties every five years. The latest revaluation date was 1 April 2022, and the updated charges for the 2025-2026 period reflect government policy.
Key Changes for 2025
From April 2025, the annual charges for properties within ATED’s scope will rise. The charges depend on the property’s value band, with higher-value properties attracting higher taxes.
| Property value | Annual charge |
| More than £500,000 up to £1 million | £4,450 |
| More than £1 million up to £2 million | £9,150 |
| More than £2 million up to £5 million | £31,050 |
| More than £5 million up to £10 million | £72,700 |
| More than £10 million up to £20 million | £145,950 |
| More than £20 million | £292,350 |
Filing and Compliance
Entities owning properties subject to ATED must file returns by 30 April each year for the upcoming tax period. For the 2025-2026 period, returns are due by 30 April 2025. Penalties apply for late submissions, even if no tax is payable. Reliefs are available for certain uses, such as rental properties, which can reduce the liability to nil.
Preparing for the Changes
Property owners should review their portfolios and ensure compliance with ATED regulations. Seeking professional advice can help navigate the complexities of ATED and identify potential reliefs.
The increased ATED charges highlight the importance of staying informed and proactive in managing property-related taxes. By understanding these changes, businesses and individuals can better prepare for the financial implications.
If your business already owns, or is planning on owning residential property and you need some specialist tax advice, please do get in touch.
