Read the original guidance here:
HMRC SDLT: SDLTM29851 – Definition of a dwelling FA03/SCH6ZA/PARA9

Understanding the Definition of a Dwelling for SDLT Purposes

The term ‘dwelling’ is used in the context of Stamp Duty Land Tax (SDLT) and has a specific meaning. While it aligns with the ordinary understanding of a home, there are some important distinctions to note.

What Is Considered a Dwelling?

A dwelling can be defined as:

• A building or part of a building that is currently used or can be used as a single home.
• A property that is under construction or being modified to serve as a single home.

Additionally, land associated with a dwelling is included in this definition. This includes:

• The grounds or gardens that surround the dwelling.
• Any land that gives a benefit to the dwelling.

Off-Plan Purchases

For buyers purchasing properties that are not yet completed, referred to as off-plan purchases, these dwellings are still recognised for SDLT relief under specific conditions. An off-plan purchase counts as a dwelling when:

• The buyer has signed contracts for the acquisition of a building or part of a building, which is intended to be constructed or adapted as a single dwelling.
• The contract has progressed significantly, indicating that the buyer is committed and that there’s been substantial performance of the agreement.
• At the time the contract has been substantially performed, construction or adaptation work on the building has not started yet.

Holiday Homes and Furnished Holiday Lettings

Holiday homes and furnished holiday lettings qualify as dwellings as long as they are fit for living in as homes. This is important for buyers who purchase these types of properties, as they can benefit from reliefs under SDLT if they meet certain criteria.

Special Cases of Accommodation

It is essential to recognise that not all types of residential accommodation fit within the SDLT definition of a dwelling. The following types of accommodation are explicitly classified as residential property for SDLT purposes:

• Accommodation for school pupils.
• Purpose-built student accommodation.
• Specialised housing for members of the armed forces.
• Some other institutional types of housing.

However, these types of accommodation do not qualify as dwellings when considering relief under SDLT. This distinction ensures that certain residential types are treated differently, impacting how SDLT is applied.

Summary of Key Points

• The general term ‘dwelling’ refers to a building suitable for one home or currently being modified to that use.
• Land associated with a dwelling is considered part of that dwelling for SDLT purposes.
• Purchasing off-plan properties can qualify as dwellings under specific conditions.
• Holiday homes count as dwellings if they can be used as homes.
• Institutional accommodations are classified differently and do not qualify as dwellings for SDLT relief.