Stamp duty relief on outright purchase

We are thinking of purchasing 5 properties. We did some research and found that if you are provider of social housing you get SDLT relief. However, there is some ambiguity whether the Council considers as for profit” or “not for profit” organisation. Hence, can be classified as of provider of social housing 

I would like to whether any other council has done outright purchase and received SDLT relief. If yes, on what basis.

Thank you.

Parents
  • Response 1:  An interesting question. I can’t provide specific examples where SDLT relief has been claimed by an authority in this way, but there are circumstances under which it might happen.

    I am not a legal expert, but it seems to me that the question centres on whether a local authority falls under the definition of “registered social landlord” used in the HMRC SDLT Manual. If so, there would appear to be two routes. The first of these only relates to a publicly subsidised purchase by a ‘profit-making registered provider of social housing’. This would excludes a local authority, but might include an arms length management organisation or other wholly-owned subsidiary (if it is a profit-making RP).

    The second route relates to purchases by a non-profit registered provider (which normally includes local authorities), and allows for relief to be claimed in respect of:

    1. purchases by housing providers that are controlled by their tenants (which excludes local authorities), or
    2. sales made by a ‘qualifying body’ (including sales by an RP or a local authority), or
    3. purchases being funded by the use of specific powers (primarily housing grant).

    There would also be potential for an authority to receive SDLT relief under a third route, if it uses a compulsory purchase order to buy a property to enable a development to proceed. However, that looks like a completely different scenario (and would only prevent duplication of the SDLT charge when the property is sold on to a developer).

    This is clearly an area for specialists, and I think it would be sensible for the enquirer to check their interpretation with the authority’s legal advisors before deciding on their course of action.

Reply
  • Response 1:  An interesting question. I can’t provide specific examples where SDLT relief has been claimed by an authority in this way, but there are circumstances under which it might happen.

    I am not a legal expert, but it seems to me that the question centres on whether a local authority falls under the definition of “registered social landlord” used in the HMRC SDLT Manual. If so, there would appear to be two routes. The first of these only relates to a publicly subsidised purchase by a ‘profit-making registered provider of social housing’. This would excludes a local authority, but might include an arms length management organisation or other wholly-owned subsidiary (if it is a profit-making RP).

    The second route relates to purchases by a non-profit registered provider (which normally includes local authorities), and allows for relief to be claimed in respect of:

    1. purchases by housing providers that are controlled by their tenants (which excludes local authorities), or
    2. sales made by a ‘qualifying body’ (including sales by an RP or a local authority), or
    3. purchases being funded by the use of specific powers (primarily housing grant).

    There would also be potential for an authority to receive SDLT relief under a third route, if it uses a compulsory purchase order to buy a property to enable a development to proceed. However, that looks like a completely different scenario (and would only prevent duplication of the SDLT charge when the property is sold on to a developer).

    This is clearly an area for specialists, and I think it would be sensible for the enquirer to check their interpretation with the authority’s legal advisors before deciding on their course of action.

Children
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