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Stamp duty - building plot
oz0707
Posts: 914 Forumite
I have forum searched for the title of this post and didn't seem to throw anything relevant up.
I've done a bit of reading and development land, i.e. a building plot appears to be classed as residential property as opposed to commercial? However there are then different rules for stamp duty with regards to developers so ended up more confused than when I started.
scenario is a Ltd. company buying a building plot which was previously garden land. The purchase price would be around 80-100k. The ltd. company does not currently own any other property however the director/shareholder does. Ltd. company intends to build the dwelling and sell for profit. What is the stamp duty implication/calculation?
Have had good advice here before so hoping for another good result!
I've done a bit of reading and development land, i.e. a building plot appears to be classed as residential property as opposed to commercial? However there are then different rules for stamp duty with regards to developers so ended up more confused than when I started.
scenario is a Ltd. company buying a building plot which was previously garden land. The purchase price would be around 80-100k. The ltd. company does not currently own any other property however the director/shareholder does. Ltd. company intends to build the dwelling and sell for profit. What is the stamp duty implication/calculation?
Have had good advice here before so hoping for another good result!
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Comments
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Looks like the company will be required to pay the addition 3% stamp duty.
https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property#comp0 -
Hey, I recognize you from last Christmas! I remember your scenario too!
At this purchase price there will be no stamp duty land tax to pay, but a return will be needed.
SDLT would however be due if by the time of completion of the purchase there is a dwelling in the course of construction on the property. If that is the case the higher rates of SDLT apply as they kick in at £40,000. It does not help you that the company does not currently own any other property.0 -
Hey, I recognize you from last Christmas! I remember your scenario too!
At this purchase price there will be no stamp duty land tax to pay, but a return will be needed.
SDLT would however be due if by the time of completion of the purchase there is a dwelling in the course of construction on the property. If that is the case the higher rates of SDLT apply as they kick in at £40,000. It does not help you that the company does not currently own any other property.
But the purchase price is £80-100k so it's already over £40k ?Everything that is supposed to be in heaven is already here on earth.
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Hi SDLT geek. Your word is gospel to me! Saved me some money when it seemed to others that I was liable. Glad to hear no liability again. To be fair it did seem to me the 3% would get me. What's the reasoning?0
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The reason is that the plot, whilst it might count as “residential” property is not a “dwelling”. At least that is until someone starts building. No “dwelling” means no 3% surcharge.
HMRC accept this point. See https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm097400
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