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Q&As
Do I have to pay Stamp Duty Land Tax on my plot of land?
We are looking to purchase a plot with detailed PP for £225k. The foundations have been dug, poured and passed by building control, services will be to the plot. The land was originally part of the rear gardens of two bungalows. From HMRC's viewpoint is this residential or not? The difference is £1500 for non-residential (according to our conveyancer) or £0 if residential (under £250k). The conveyancer is suggesting we get expert advice from a tax accountant but that might (or might not) cost more than the £1500. Do I just pay the £1500 and move on? This is our first custom build and is for our own home.
One Answer
Hi Neil,
Thanks for your question.
It would seem likely that the plot would be deemed residential given that the plot is in the garden of an existing dwelling. There may still be SDLT to pay if you already own another residential property.
However, I am not a specialist tax adviser, and therefore I would highly recommend seeking professional advice, as there may be considerable sums involved.
If you choose not to get professional advice, then it’s important to do a lot of research to ensure you understand the complexity of the rules surrounding tax on a property, as there may be a number of factors which haven’t mentioned in your query that would significantly change the advice you receive (such as business use of your home, or buying a property with the intention of making a gain).
You also need to be sure that you are reading the tax law in place at the time you undertook the transaction, as the law changes regularly.
Katherine Taylor (Build It’s Finance Director)