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Higher rates - additional residential properties

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Nick Holmes

Posted on:
01/05/17 13:17
Subject: Higher rates - additional residential properties

I have a case where a developer is buying a disused church and ancillary accommodation which is basically a bungalow a priest occupied. The site has planning for 8 houses. Does this count as mixed use even though planning has been obtained. To be clear the site when purchased will consist of the church and the bungalow. Thank you.
Patrick Cannon

Posted on:
31/05/17 16:34
Subject: RE: Higher rates - additional residential properties

Nick, the legislation in s 116(1)(a) refers to a building that "is in the process of being ... adapted for [residential] use." Arguably the obtaining of residential planning permission forms part of such a process although I think that that is too wide a reading and the words "process" and "adaption" are intended to refer to the physical building work rather than mere planning permission which of course might not lead to anything and could eventually lapse if the work was never started. Indeed if planning use counts then the existing permitted use as non-residential ought to have at least equal weight with the planning permission to change to residential. HMRC say at SDLTM20080 that: "Where, at the effective date, an existing building is being adapted or marketed for, or restored to, domestic use, it is treated as residential property." I have not researched their authority for the bit about 'marketed" making it residential but on the face of it I do not agree with them.
Justin Bryant

Posted on:
31/05/17 17:41
Subject: RE: Higher rates - additional residential properties

I agree. The corollary if PC were wrong re mere planning permission would be that MDR could be claimed for that - which cannot be right.

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