Stamp duty surcharge

Roysee

Hi
Stamp duty surcharge on leasehold property
I am proposing to buy 4 student (one bedroom) flats in the same building. The flats all have a 123 year lease. Am I correct that as the flats are subject to a lease I will not be stung for the 3% sdlt surcharge.

I also read that properties purchased in the same building will be lumped together as if one building. As each flat is around £50,000 does this mean I would be assessed for sdlt as if the purchase was £200,000. Maybe I have misunderstood as this seems very unfair, but then BTL is becoming very unfair!

G_M

Roysee wrote: »

Hi
Stamp duty surcharge on leasehold property
I am proposing to buy 4 student (one bedroom) flats in the same building. The flats all have a 123 year lease. Am I correct that as the flats are subject to a lease I will not be stung for the 3% sdlt surcharge.
No.

I also read
Where? Link?
that properties purchased in the same building will be lumped together as if one building.
No, unless one is a principal dwelling and the other is subsiduary. Unliikely here.
As each flat is around £50,000 does this mean I would be assessed for sdlt as if the purchase was £200,000.
No.
Maybe I have misunderstood
Yes.
as this seems very unfair, but then BTL is becoming very unfair!

Read the guidance:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/570876/SDLT_Higher_rates_for_additional_properties.pdf

saajan_12

Roysee wrote: »

Hi
Stamp duty surcharge on leasehold property
I am proposing to buy 4 student (one bedroom) flats in the same building. The flats all have a 123 year lease. Am I correct that as the flats are subject to a lease I will not be stung for the 3% sdlt surcharge. - No, the freeholder of the building wouldnt' be in scope for the 3% as his building is subject to long lease(s) to leaseholders like you. You own the 123yr lease to the 4 flats and will let them to students on ASTs not long leases, so you are in scope for the additional 3% rate.

I also read that properties purchased in the same building will be lumped together as if one building. As each flat is around £50,000 does this mean I would be assessed for sdlt as if the purchase was £200,000. - Not necessarily, are the 4 flats truly separate units with their own cooking / washing / living facilities and bought/sold on the open market as individual flats -> then likely treated individually.
Or are there significant common areas more like studio bedsits within a larger house -> then treated as one Maybe I have misunderstood as this seems very unfair, but then BTL is becoming very unfair!

If they are truly separate £50k flats then SDLT would be 3% = £1500 ie £6k total assuming you already own your home. Otherwise the first flat would be 0% SDLT.

need_an_answer

I can confirm that leasehold flats do attract the surcharge and buying in the same block also attracts the surcharge.

I have purchased 2 flats within the same building and was charged correctly for the purchase.

BTL...You pay your money you take your choice.

Roysee

The flats are all self contained

need_an_answer

Mine were too!

Hence my belief that additional stamp duty needs to be paid

G_M

So 4 separate purchases, each with individual SDLT liability.

AdrianC

Roysee wrote: »

I am proposing to buy 4 student (one bedroom) flats in the same building.

Oh, lordy. I hope you've done the numbers properly, because these schemes scare me slightly, and the market is in serious danger of being badly flooded in many places.

...but then BTL is becoming very unfair!

No, it's not "unfair". It's just being discouraged through taxation changes.

00ec25

Roysee wrote: »

The flats are all self contained

so you need to read the section in the guide already provided above regarding the rules about multiple dwellings relief...remembering that the threshold is 40,000 so your 50k flats are looking it right in the eye

SDLT_Geek

With a multiple dwellings relief claim, the SDLT would work out at 3% of the price. I doubt if these would be seen as four unlinked transactions. But with MDR you get to the same amount of tax anyway on these figures (each with a price of between £40K and £125K).

Roysee

Thanks for all your replies. Having read the extensive guidance, am thinking the leasehold point is a red herring for my student flats. The guidance states:
2.8A Depending on its nature purpose-built student accommodation is treated as either residential or non-residential property for the purposes of SDLT. The purchase of such accommodation is not liable to the higher rates and owning such a property will not cause you to be within the higher rates on a subsequent purchase5. This only applies to purpose built student accommodation and not an ordinary house or flat for students to live in.

As my student flats are purpose built and self contained I conclude no sdlt is payable..Result! Or have I got it wrong?