SDLTM09766A | SDLT - higher rates for additional dwellings: Individuals - purchasing two or more dwellings (2) - Summary of Conditions - Para 6 Sch 4ZA FA2003

Following on from the example at SDLTM09766, if only one of the purchased dwellings meets all three conditions in Para 5, we must look at the test in Para 6 Sch4ZA FA2003.

Para 6 brings the purchase of multiple properties within the definition of a “higher rates transaction” if: -

• Condition A - The purchased dwelling which does meet all three conditions is NOT a replacement for the purchasers only or main residence and

• Condition B - At the end of the day of purchase, the purchaser has a major interest in a dwelling (other than one of the purchased dwellings) worth more than £40,000 and not subject to a lease with more than 21 years left to run.

EXAMPLE – in the example of George (previous page) the main house (the dwelling which does meet all three conditions in Para 5) is not a replacement for his main residence. In addition, George owns a flat worth over £40,000 which is let out to tenants. The purchase therefore meets conditions A and B of Para 6 and is a higher rates transaction liable to the higher rate of SDLT.

In any case where none of the interests in dwellings purchased meet both Conditions A and B (for example the purchase of a freehold over a block of flats where all the flats are subject to long leases) the higher rates will not be applicable.