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JGM, Solicitor
Category: Law
Satisfied Customers: 13511
Experience:  30 years as a practising solicitor.
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I'm considering purchasing a residential development

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HelloI'm considering purchasing a residential development opportunity which comprises of an existing large detached house, and comes with full planning approval for the demolition of the house and then the new build of a residential block of 8 No apartments.The land purchase is £1420,000 and I would be grateful if you could advise me on the stamp duty applicable to this purchase.
Am I correct in my understanding that due to the fact that the purchase would be a commercial purchase through my Ltd company and the fact that there will be over 6 No plots, then the stamp duty will be calculated as non-residential, and therefore attract a considerably reduced level of stamp duty?

Thank for your question. The future development of the site is not relevant for stamp duty purposes. The “six or more” rule only applied when there is the sale of six or more existing residences. They can be deemed commercial. What you are currently buying however has a detached house on the land so the transaction will be treated as residential. You will pay stamp duty and the additional supplement. You might want to consider writing into the contract that the house will be demolished before the purchase. That would change the nature of the transaction to purchase of land and would be deemed commercial.

Customer: replied 10 months ago.
Many Thanks for the clarification

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