SDLT if a property is considered uninhabitable
12 March 2020 by Sarah Shea
When purchasing a residential property with a property value over £150,000, Stamp Duty Land Tax (SDLT) will be payable either at the standard or higher rate. The higher rate may be payable if the purchase of the property will result in an individual owning two or more residential properties, or if the property is purchased in the name of a company.
However, the recent case of P N Bewley Ltd v Revenue and Customs Commissioners  UKFTT 65 (TC) has highlighted that the higher rate of SDLT may not be payable if the property is considered uninhabitable at the time of the purchase.
In this case, the property was connected to the requisite services however, the pipework had been removed together with some of the floorboards. Asbestos was also present at the property, removal of which could only be successfully completed by dismantling the property.
The Tribunal considered that the suitability of the property for use as a dwelling must be assessed at the time of the purchase, the past or future use of the property was not relevant. On these particular facts, it was held that the property was not considered suitable for use as a dwelling at the time of the purchase and so the higher rate of SDLT was not payable.
It is therefore, very important when purchasing a derelict residential property that you speak to your advisor as quickly as possible.
If you require further information on the above, please contact us by calling 01206 700113 or email [email protected] We also have links to tax advisors who can assist in complex areas.
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