House-building company buys an individual’s home.
Where a house-building company or property trader buys a home from an individual who is buying a new home from them, the purchase by the house builder or property trader is exempt from SDLT if certain conditions are met.The individual must:
- have lived in the home as their main or only residence at some time during the two years before the house building company or property trader bought it
- buy a new home from the house building company
- intend to live in the new home as their main or only residence
In addition, the area of land that the house building company or property trader buys along with the old home must not exceed certain limits – normally 0.5 hectare.
To claim this relief, you’ll need to enter relief code 08 in the SDLT return.
Note that this relief doesn’t apply to individuals who swap houses.
SDLT relief for ‘chain breaking’ purchases
A property trader may buy an individual’s house to enable the individual to complete the purchase of a home where arrangements to sell the individual’s existing home have fallen through. This purchase is exempt from SDLT if all of the following conditions are met:
- the individual lived in the house as their main or only residence at some time during the two years before the property trader bought it
- the property trader is buying the house in order to allow the purchase of the new home to proceed
- the individual intends to occupy the new home as their only or main residence
- the area of land the property trader buys is within certain limits – normally 0.5 hectare
To claim this relief you’ll need to enter relief code 09 in the SDLT return.
SDLT relief for right to buy properties
A relief from SDLT is available for right to buy transactions. A right to buy transaction is either of the following:
- the sale of a dwelling at a discount by a public sector body like a local housing authority
- the sale of a dwelling where there is a preserved right to buy
In both cases the definition also covers the grant of a lease of a dwelling.
The effect of the relief is that SDLT is calculated on the discounted price paid by the purchaser and does not include any additional payments which may become due if, for example, the dwelling is sold on before a certain period has elapsed.
To claim this relief, enter relief code 22 in the SDLT return.
