Further to our update of Wednesday (click here) more detail regarding the bulk residential purchase relief has been published in the form of draft legislation intended to be included in, and have effect from Royal Assent to, the Finance Act 2011.
The relief will apply to the purchase of multiple "dwellings" either in a single transaction or by "linked" transactions. "Dwelling" includes:
- a building already in existence and used or suitable for use as a dwelling;
- a building in the process of being constructed or adapted for use as a dwelling;
- land that subsists for the benefit of the dwelling, i.e. gardens, car parks etc; and
- off-plan purchases in certain circumstances.
As mentioned in Wednesday’s update, the relief will not be available where the interest being acquired is subject to a lease or leases with an initial term of 21 years or more. There will also be a claw-back of SDLT if the conditions for relief are not complied with for the following three years, e.g. if the property ceases to be used for residential purposes. In such circumstances a further return will have to be filed with HMRC (and SDLT paid) as if the effective date were the date of non-compliance.
The relief will also not apply to transactions where charities relief or group relief would be available, or to the exercise of tenants’ rights to buy or crofting community rights. Importantly, disadvantaged areas relief will not be available to further reduce SDLT where bulk purchase relief is claimed.