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Q&As
For stamp duty purposes, is my barn with residential planning permission classified as commercial or residential?
Could anyone advise on stamp duty liability on purchasing a barn with planning permission for residential, but where no work has been started? Is this classed as Commercial (it's an unconverted barn) or Residential (it's an unconverted barn with planning permission)?
2 Answers
Hi Mark,
That’s a good question, I will give this to one of our experts and hopefully they can clarify your situation.
Best wishes,
Elinor
This is slightly murky water as much rests on whether the barn, in its current state, is considered suitable for use as a dwelling. I’m not a tax law specialist, but my understanding is that most barns – even if they already have planning for conversion – would attract the non-residential form of Stamp Duty Land Tax (SDLT).
Non-residential SDLT is currently set at 0% for purchase prices up to £150,000, then 2% on the next £100,000 and 5% on anything beyond that (whereas residential SDLT is 0% up to £125,000). However, there are some circumstances where residential SDLT may apply. For instance, if some of the construction works have already begun, you might be able to argue a case with HMRC.
It’s worth bearing in mind that SDLT refers to English and Northern Irish land tax, whereas Scotland and Wales have their own systems called Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT) respectively. If your property is not in England or Northern Ireland, check your devolved government website for the exact tax rules and thresholds.
Best of luck with your plans,
Chris Batesmith (Build It’s content director)