SDLTM09755 | SDLT - higher rates for additional dwellings: Meaning of dwelling - further information

It will be important in some cases to determine whether a property consists of or includes one, or more than one, dwelling.

It is a question of fact whether a purchase consists of one or more than one dwelling. A self-contained part of a building will be a separate dwelling if the residents of that part can live independently of the residents of the rest of the building, including independent access and domestic facilities with the necessary degree of privacy and security.

SDLTM00410 – SDLTM00430 provides more detailed information on the factors HMRC considers when determining how many dwellings have been purchased.

Subsidiary Dwellings

In certain cases, a purchase of more than one dwelling will be treated for higher rates purposes the same as if a single dwelling had been purchased. This is the case if all but one of the dwellings purchased are subsidiary dwellings. A subsidiary dwelling must be within the same building as or in the grounds of another dwelling purchased in the same transaction (the principal dwelling). The value of the principal dwelling and the garden and grounds attributable to that principal dwelling must be at least two thirds of the total value of all the dwellings (including their garden and grounds) purchased in the transaction.

There can be more than one subsidiary dwelling purchased at the same time as a principal dwelling, but the principal dwelling must always be at least two thirds of the total transaction value.

Where a principal dwelling is purchased and all the other dwellings purchased are subsidiary dwellings, the tests for whether the transaction is a higher rates transaction are applied as if there was only one dwelling purchased. If the purchase of a principal dwelling is a first property purchase or a replacement of a main residence the higher rates will not apply.

Where the principal and subsidiary dwellings are not purchased in the same transaction, then the rules about subsidiary dwellings do not apply, even if the transactions are linked.

Multiple dwellings relief may still be claimed where there are separate dwellings even when one or more of these comprise subsidiary dwellings.