Can you avoid the additional 3% SDLT

Is there a way to avoid paying the additional 3% stamp duty land tax when you buy a property?

1. Buy a mixed use property. Perhaps a shop and flats above it. Non-residential rates apply to this transaction which is considerably less than residential rates and the 3% additional SDLT doesn't apply ?

2. Look to buy non-residential properties but not just any commercial property, look for say, an accountants or dentists office which are typically a property which looks like a house on a residential road.

Non-residential SDLT applies to these purchases and you could look to convert them to a residential property later.

You could even save more tax on the conversion as VAT on converting a commercial property to residential property is reduced from 20% to 5%.

3. You could also look to purchase multiple properties. Where you purchase 6 or more properties in a single transaction you could elect to apply non-residential rate or take advantage of Multiple Dwelling Relief (MDR), which ever gives you a more favourable outcome.

If you have any SDLT questions please don't hesitate to message me. #taxtiptuesday

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Alex Bahamin
Tax Accountant