What is the rate of SDLT on the purchase of land with planning permission for a dwelling?


“I have a Stamp Duty Land Tax query and seem to be getting conflicting opinions.  Client is buying a residential garden from the seller, with the benefit of planning consent to build a house. Client will not have sold his main residence when it complete. So the question is:

A)     Is it standard rate;

B)      higher rate; or

C)      commercial rate.

I should be grateful for any help.”

Source: BLG Member


It will be the rate for non-residential or mixed property in Table B.  Non-residential property is anything that is not residential property.  The rates in Table A apply only where the subject-matter of the land transaction (or of linked transactions) is entirely residential property.

‘Residential property’ means a building (or part of a building) that is:

(i) used as a dwelling, or

(ii) suitable for use as a dwelling, or

(iii) in the process of being constructed or adapted for such use, and

(iv)  land that is or forms part of the garden or grounds of such a building (including any building or structure on such land).

(section 116(1) FA 2003).

The planning permission does not affect the position.  In my view the garden or grounds of a dwelling are only residential property when purchased together with the relevant dwelling.  In other words, the ‘and’ in (iii) is conjunctive not disjunctive.

At the time of publication this response was correct however as tax legislation and practice change from time-to-time you should take specific advice before taking any action.

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