SDLT: Helpful guidance for developers buying dilapidated property
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SDLT: Helpful guidance for developers buying dilapidated property
Further to my blog last year relating to prospective clarification of what constitutes a dwelling, the recent case (P N Bewley Ltd v HMRC) has provided some assistance.
Here, the development company argued that a bungalow which it had bought should not be classed as residential land because, following the acquisition, it would have to be demolished because it was uninhabitable due to the presence of asbestos (also heating system, pipes and floorboards had already been removed).
Although, as I mentioned before, the fact that a property is dilapidated does not necessarily stop it being “residential land”, the court agreed with the developer that the state of disrepair was sufficiently bad to mean the property could not be classed as suitable for use as a dwelling. Accordingly, the developer should pay SDLT at the non-residential rate.
I was pleased in particular to note the judge’s comment, driven by the need for more housing, that “we should be slow to find that a corporate purchase is liable to the higher rates of SDLT, especially by a developer as in this case who was to and did create a habitable and suitable dwelling on the site after demolition of the bungalow.”
If you have any queries relating to SDLT please email me.