SDLTM00390 | Scope: what is chargeable: land transactions: Residential Property– Dwellings (Further Considerations)

(This page was introduced on 01 October 2019)

Mixed Residential/Non-Residential Property

It can be more complicated to decide whether a building is suitable for use as a dwelling, when a building is used partly as a dwelling and partly for other purposes.

For buildings containing areas used as a dwelling and areas used for business purposes, a distinction can be drawn between the scenario where certain rooms of a building that would otherwise be a dwelling are used for work purposes (the office at home example) and the scenario where the building containing residential accommodation is divided into separate areas, one (or more) of which are adapted for use as commercial or business premises (e.g. a house which has been part converted into a surgery).

In situations similar to the ‘home office’ example, the rooms used for office work will normally remain suitable for use as part of the dwelling and the building overall remains in use as a dwelling. Therefore, the home office/study is not mixed residential/non-residential property.

The position is more nuanced where a house is converted or simply used without specific conversion as part living accommodation and part commercial. If the building is sold as a single interest then the commercial aspect must be examined. Where the actual day to day use of part of the building is set aside for commercial use and is used separately from the parts of the building which form the dwelling, it is reasonable to say that the commercial parts are not ‘used as’ a dwelling. So for instance two rooms of a house might be used for a doctor’s surgery while the rest of the house provides accommodation. If the commercial rooms are dedicated to use as the surgery and not also used as part of the accommodation, those rooms are not ‘used as’ a dwelling.

The actual use of the rooms does not determine in itself whether the commercial areas are ‘suitable for use as’ a dwelling. The degree of conversion required and degree of separation from residential areas will be key factors. As with the chalet example, this will be a question of fact and context. In many cases the rooms given over to the doctor’s surgery could easily be reincorporated into the residential parts of the building without the need for any adaptation. So notwithstanding their actual use, they will remain suitable for use as a dwelling. But if the surgery area has been converted in some way which makes it suitable for commercial use but not living accommodation (e.g. installation of specialist equipment such as a dentist’s chair or an X-ray device), or if planning restrictions apply which prevent it being used for residential purposes then it is more likely that it will no longer be ‘suitable for use as’ a dwelling.