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HMRC internal manual

Stamp Duty Land Tax Manual

From
HM Revenue & Customs
Updated
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Scope: when is Stamp Duty Land Tax (SDLT) chargeable: higher rate charge for acquisitions of residential property by certain non-natural persons FA03/S55/SCH4A: what is a dwelling? FA03/SCH4A/PARA7

A dwelling is defined for the purposes of the higher rate charge as a building, or part of a building, that is suitable for use as a single dwelling, or is in the process of being constructed or adapted for such use.

Residential properties that are in the process of being constructed will be treated as dwellings at the point when walls begin to be constructed upon the foundations. Those walls do not have to be above ground level.

Where a building includes a number of dwellings (for example, a block of flats), all the dwellings in the building will be treated as being in the process of being constructed when this test is met, not when construction of the individual dwelling is commenced. This principle applies even if the ground floor is intended for non-residential use (for example, where the building consists of a shop with flats above).

Land that is, or is to be, occupied or enjoyed with the dwelling, such as a garden or grounds (including any building or structure on such land), is taken to be part of the dwelling. This will usually be a question of fact depending on the individual circumstances of each case.

Land that subsists, or is to subsist, for the benefit of the dwelling is taken to be part of the dwelling. This applies to an interest in land which is not contiguous with the dwelling and its garden or grounds: for example, a separate garage in a block.

‘Off-plan’ purchases

The subject-matter of a transaction is taken to include an interest in a dwelling where

  • the effective date is the date of substantial performance of the contract by virtue of FA03/SS44-45A or SCH17A/PARA12A/PARA19,
  • the main subject-matter of the transaction consists of or includes an interest in a building, or a part of a building, that is to be constructed or adapted under the contract for use as a single dwelling and
  • construction or adaptation of the building, or part of the building, has not begun by the time the contract is substantially performed.

This will include an ‘off-plan’ purchase where the purchase price is paid before construction has commenced.