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HMRC internal manual

Stamp Duty Land Tax Manual

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: when is a property ‘suitable for use as a dwelling’?

Guidance on when a property is ‘suitable for use as a dwelling’ can be found in Statement of Practice 1/2004. This guidance is supplemented by SDLTM20076. Whether a property is suitable for use as dwelling is a question of fact. SDLTM20076 states that:

‘Use at the effective date of the transaction overrides any past or intended future uses for this purpose. If a building is not in use at the effective date but its last use was as a dwelling, it will be taken to be ‘suitable for use as a dwelling’ and treated as residential property, unless evidence is produced to the contrary.

Undeveloped land is essentially non-residential but may be residential property if, at the effective date, a residential building is being built on it. Where, at the effective date, an existing building is being adapted or marketed for, or restored to, domestic use, it is treated as residential property.’

A property with a long history of non-residential use, and which does not have permission to be occupied as a residence, is unlikely to be viewed by HMRC as a dwelling, or suitable for use as a dwelling.

HMRC may take a contrary view where, for example, a property’s last use was as an office but before the property is sold planning permission is granted for use as a dwelling, provided that, at the effective date of the transaction, the property is otherwise suitable for use as a dwelling or is being adapted for such use.