Stamp Duty Land Tax (SDLT) is most relevant when purchasing property above the £925,001 threshold. Properties over this threshold are currently taxed at 10% of the purchase price. However, many buyers are unaware of savings that can be made on mixed-use land and property, where stamp duty is calculated differently.
The Treasury defines mixed-use property as commercial property, agricultural land, forestry, any land or property that is not used as a dwelling, and six or more residential properties bought in a single transaction.
It should be noted that the land must be outside of the curtilage or amenity of the property. For example, if purchasing an estate with a manor house and parkland, HMRC may consider the parkland to be for the amenity of the house and not qualify for mixed-use rates.
The new rates and thresholds applied to mixed-use properties are £150,001 to £250,000 at a rate of 2% and properties above £250,000 at a rate of 5%. This could result in significant savings being made when purchasing a property if it qualifies for mixed-use rates.
HMRC will consider purchases on a case-by-case basis and it will be the responsibility of the purchaser to prove that the property is for mixed-use, for example demonstrating that the land is farmed or by supplying agricultural agreements.