SDLTM09775 | SDLT - higher rates for additional dwellings: Condition B - Para 3(3) Sch 4ZA FA2003

Condition B is that, on the effective date of purchase [see SDLTM07600 for meaning of effective date], the interest in the dwelling purchased is either not subject to a lease or, if it is subject to a lease, the lease has no more than 21 years left before it expires, as at the date of the transaction.

A purchase of a freehold or leasehold interest that is subject to a lease with more than 21 years remaining will not be a higher rates transaction and will not be chargeable at the higher rates.

Example 1

A freehold property is subject to a lease with 80 years left to expiry.

If the freehold interest is acquired it will not meet Condition B, however if the leasehold interest is acquired then Condition B would be met. The freehold interest is subject to a lease with more than 21 years to run. The leasehold interest is not, itself, subject to a lease of any kind.

Example 2

A freehold property is subject to a 999-year head lease which has 950 years to expiry and the head lease is itself subject to an underlease which has 50 years to expiry.

If either the freehold interest or the head lease is acquired, then condition B will not be met as they are both subject to leases with more than 21 years left to run. However, an acquisition of the underlease would meet condition B.