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SDLT for 'first time buyer'

A question on the legislation

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Dear all,

To say that I've had more than a few SDLT queries over the past month is an understatment. It seems that solicitors (conveyancers for the most part) are unwilling to advise clients on their potential SDLT liabilities, despite the fact that they are required to file a return 14 days after completion! Anyway rant over.

A client has a son who owns land left to him by his grandmother. Currently there is planning permission for 5 properties on this land but no building works have begun. The son would like to buy a 2 bed terrace for £280K. The client has asked me whether their son is:

a) entitled to the first time buyers exemption for SDLT?

b) If not, will he get caught by the 3% SDLT surcharge?

The price is below the threshold so that box can be ticked, however the interest in his land is causing me bother.

I have looked throught FA2003/FA2018 and found the following on Sch 6Za Part 3:

“First-time buyer”

6(1)In this Schedule “first-time buyer” means an individual who—

(a)has not previously been a purchaser in relation to a land transaction the main subject-matter of which was a major interest in a dwelling,

(b)has not previously acquired an equivalent interest in a dwelling situated in a country or territory outside England, Wales and Northern Ireland,

(c)has not previously been, or been one of the persons who was, “the person” for the purposes of section 71A or 73 in a case where the main subject-matter of the first transaction within the meaning of the section concerned was a major interest in a dwelling, and

(d)would not have been such a person for those purposes in such a case if the provisions mentioned in paragraph (c) had been in force, and had had effect in the country or territory concerned at all material times (subject, where required, to appropriate modifications).

(2)For the purposes of sub-paragraph (1)(b) and (d), ignore a lease which has less than 21 years to run at the beginning of the day after the date on which it is acquired.


The main issue with this is of course whether the land acquistion (which now has planning permission) counts as a dwelling. This is the point I am stuck on with regard to the first time buyer provisions.

With regard to the surcharge, the son has never owned the land (or future new properties) as his main residence so his 2 bed terrace imo will escape the additional 3% should it come to this.

Interested to hear your thoughts and advice.


Replies (2)

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By Justin Bryant
28th May 2019 17:39

Planning permission is irrelevant re dwelling test, as is how you acquire a dwelling re FTB relief. For SDLT purposes HMRC view a dwelling is being constructed when bricks for its walls are laid on foundations.

Thanks (1)
By JohnShallcross
06th Jun 2019 21:15

I agree with Justin, as yet there is no "dwelling".

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