For the purpose of stamp duty land tax (SDLT), non-residential property includes, but is not limited to, commercial property such as offices, shops, warehouses, property which is unsuitable for living in, and land used for industrial, commercial, or agricultural purposes including woodland. It also includes land that has been designated for non-residential use, such as land zoned for commercial development.
By Phil Kinzett-Evans
The SDLT rates for non-residential property differ from the rates for residential property. SDLT for non-residential property is payable on property costing over £150,000 (correct at Feb 2023) with a maximum rate of 5%, whereas the residential rates can start at 3% (for additional dwellings) and be up to 17% where the property is a higher threshold interest and is being purchased by a non-UK resident company. The actual rate applied depends on a number of factors including purchase price and whether the property is freehold or leasehold.
The definition of a non-residential property is specified in the Finance Act 2003, which categorises land as a “dwelling” or “non-dwelling”. A dwelling is defined as a building or part of a building that is used, or suitable for use, as a single dwelling or as two or more separate dwellings, and any garden or grounds that exist for the use or enjoyment of that dwelling. Non-residential property is anything that is not residential property.
It’s important to note that the classification of land as non-residential or residential can change over time depending on the use of the land. If a property that was originally classified as non-residential is subsequently used as a dwelling, it will be reclassified as a residential property for the purpose of SDLT.
Do get in touch below if you would like SDLT advice, before, during or after your property purchase. Taking advice could save you a significant amount.
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