After the case that made headlines in 2019 for a couple that were reclaimed their resi SDLT on a non-habitable property, there’s been many posts that have made wild claims and assumptions.

So here’s the reality – in Oct 19, HMRC updated their guidance (SDLTM00385) on what derelict means and I thought it would be useful to share it here….

“A residential property that is no longer habitable as a dwelling, due to dereliction for example, would not be residential property, on the basis that it is not suitable for use as a dwelling.

However, there is a clear distinction between derelict property and a dwelling that is essentially habitable, but in need of modernisation, renovation or repair, which can be addressed without materially changing the structural nature of the property. In this case, if the building was used as a dwelling at some point previously and permission to use as a dwelling continues to exist at the effective date of transaction, it will be considered suitable for use as a dwelling. Whether a property is derelict to the extent that it no longer comprises a dwelling is a question of fact and should only apply to a small minority of buildings.

The removal of, for example, a bathroom or kitchen facilities before sale will not be regarded as making a building unsuitable for use as a dwelling. These are internal fittings and would not constitute structural changes to the dwelling that would mean the building is no longer suitable for use as a dwelling. A new kitchen or bathroom suite could be fitted relatively quickly and cheaply and is a common improvement to a dwelling. Likewise, substantial repairs required to windows or a roof would also not make the building unsuitable for use as a dwelling. Other examples of issues which may be easily addressed in the short term include the need to switch services back on and dealing with an infestation of pests.”

If you want SDLT or any other property tax or strategy advice and support, then contact @PTA by emailing me on mark@property-tax-advice.co.uk