Stamp Duty on 8 Bedroom HMO Commercial or Residential?

[AnimalMother]

Stamp Duty on 8 Bedroom HMO Commercial or Residential?


My LTD company is buying a 8 bedroom HMO, its a 7 bedroom with an additional 1 bedroom annex flat. Purchase price £275k

To my surprise my solicitor is proposing a stamp duty bill of £8250, he thinks it may be commercial. The residential rate is around £3500.


I see it as 100% residential since its only used for ‘residential’ purposes and the council charge council tax rather than business rates so they clearly think it’s residential.



Am I right?

Edited by AnimalMother on Thursday 14th January 11:54

[Ozzie Osmond]

I think your solicitor is right.

"General residential property which can be occupied as a dwelling will ‘count’ for the purposes of the relief, whereas property used as (for instance) a residential home, hospice, hotel or similar establishment will not be eligible."

[AnimalMother]

Thanks, he's actually changed his mind now.

On the basis that it is a house and not a hall of residence- which must be right then we can apply the residential rate

The authority seems to me to be Finance Act 2003 section 116


I didnt mention that the house is let to students as I didnt know it was relevant. Here is the quoted act:


(2)For the purposes of subsection (1) a building used for any of the following purposes is used as a dwelling—

(a)residential accommodation for school pupils;

(b)residential accommodation for students, other than accommodation falling with subsection (3)(b);

(c)residential accommodation for members of the armed forces;

(d)an institution that is the sole or main residence of at least 90% of its residents and does not fall within any of paragraphs (a) to (f) of subsection (3).



(3)For the purposes of subsection (1) a building used for any of the following purposes is not used as a dwelling—

(a)a home or other institution providing residential accommodation for children;

(b)a hall of residence for students in further or higher education;

(c)a home or other institution providing residential accommodation with personal care for persons in need of personal care by reason of old age, disablement, past or present dependence on alcohol or drugs or past or present mental disorder;

(d)a hospital or hospice;

(e)a prison or similar establishment;

(f)a hotel or inn or similar establishment.


The above is from http://www.legislation.gov.uk/ukpga/2003/14/sectio...

Edited by AnimalMother on Thursday 14th January 12:09

[Ozzie Osmond]

That's right, different rules for student accommodation.