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Where Taxpayers and Advisers Meet

SDLT for buying leasehold + freehold of a single house

Joined:Thu Jun 15, 2023 12:38 am
SDLT for buying leasehold + freehold of a single house

Postby mortezanejad » Thu Jun 15, 2023 12:51 am

In desperate need of some advice.

We are buying a terraced house which has two titles - one title is a leasehold title with 13 years remaining, the other title is the freehold (reversion) for the same house. Both titles are valued over £40,000. We will be merging the titles AFTER the purchase of the two titles (they cannot be merged before purchase as they're owned by different entities).

We are buying both titles and the titles will be a linked transaction since the sellers are 'connected' and the transactions are part of the same deal (this is known for certain).

What we don't understand (neither do our conveyancers) is whether the higher rate of SDLT (for additional properties) would apply to the sum of our linked purchase. It does not make logical sense for it to apply since we will not own 'a major interest' in another dwelling . The only dwelling we will own (which will be our main and only residence) is the house which we are buying both titles for. I believe this should be treated similar to a situation where a leaseholder of a flat decides to buy a 'share of freehold' to the same flat from his/her landlord - in which case the higher rate of tax shouldn't apply either?

Any help would be very much appreciated

Joined:Sat Feb 01, 2014 3:26 pm

Re: SDLT for buying leasehold + freehold of a single house

Postby bd6759 » Thu Jun 15, 2023 5:56 pm

I think you’ve pretty much summed it up. How many dwellings will you have an interest in? If it is less than 2, you don’t need to consider the additional rate.

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