| Not suitable for use as a dwelling |
SDLTM00385: Whether a property has deteriorated or been damaged to the extent that it no longer comprises a dwelling is a question of fact and will only apply to a small minority of buildings. A property might not be considered “suitable for use” as a dwelling (sometimes referred to as uninhabitable) on the basis that it has been damaged to the extent that normal repair work, replacement or modernisation cannot resolve the issues.
However, there is a clear distinction between a derelict property and a dwelling that is in need of modernisation, renovation or repair, which can be completed without first addressing structural defects that would make the property dangerous to work on and or live in. If the building was used as a dwelling at some point previously, it is fundamentally capable of being so used again (there being no lack of structural or other physical integrity preventing this). If permission to use as a dwelling continues to exist at the effective date of transaction, a building will be considered suitable for use as a dwelling, even if not ready for immediate occupation. SDLTM00385 |
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48 (1). So, the draftsman has contemplated a situation where a property requires change, and has extended the definition (only) to a situation where the process of such construction or adaption has already begun. This strongly implies that a property is not suitable for use within paragraph 7(2)(a) if it merely has the capacity or potential with adaptations to achieve that status. Second, SDLT being a tax on chargeable transactions, the status of a property must be ascertained at the effective date of the transaction, defined in most cases (by section 119 FA 2003) as completion. So, the question of whether the property is suitable for use as a single dwelling falls to be determined by the physical attributes of the property as they exist at the effective date, not as they might or could be. A caveat to the preceding analysis is that a property may be in a state of disrepair and nevertheless be suitable for use as either a dwelling or a single dwelling if it requires some repair or renovation; that is a question of degree for assessment by the FTT. Upper Tribunal Fiander
50. It is clear that there is a degree of disrepair that will result in a property, which may otherwise resemble and meet the requirements for (and indeed have been previously used as) a dwelling, not being suitable for use as a dwelling. However, a significant degree of disrepair is required. Although suitability is tested on the effective date, “suitable for use” on the effective date does not mean suitable for immediate use and occupation (“ready to move in”) on that date. There is, as it were, a margin of appreciation, a degree to which a property can fall short of being ready for an occupier to move in without the property ceasing to be suitable for occupation as a dwelling. Disrepair which can be cured (things which are not fundamental but which need fixing, as the FTT put it in Fiander) is not enough, nor is it necessarily enough that there is a feature of the property which makes it potentially more dangerous to inhabit than one would normally expect (unsuitable and potentially dangerous cladding is the example from Fish Homes Ltd).
53. Pulling all of this together, I consider that a building which was recently used as a dwelling, has not in the interim been adapted for another use and is capable of being so used again (a building, such as the one in Bewley, the defects in which cannot be put right at all, will not be capable of being so used) will count as a dwelling, even though it is not ready for immediate occupation, unless the reason/s why it is not ready for immediate occupation are so fundamental (being radioactive or at high risk of collapsing, for example) that the work required to put these problems right goes beyond anything that might ordinarily be described as repair, renovation or “fixing things” (examples of this sort of work being installing a new boiler or heating system, damp problems or floors needing replacing).
54. I accept that the state of the gas and electrics and aspects of the water supply (including the need for a new boiler house roof) made the Property too dangerous for a reasonable person to occupy immediately, but the works required to put those problems right were not fundamental and were much closer to the new boiler/heating system/curing damp/new flooring end of the spectrum than the radioactive house/dangerous structure/potentially collapsing walls end. Mudan
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| Repairs, renovations and other non-fundamental issues
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SDLTM00385: Examples of repairs, renovations and issues that will not make a property unsuitable for use as a dwelling include, but are not limited to:
- The temporary removal of bathroom or kitchen facilities before sale.
- Substantial repairs required to windows, floors, or a roof.
- Replacement boiler and pipework or
- Unsafe electrical wiring.
- The need to switch services back on.
- An infestation of pests.
- Damp proofing required or plasterboard damage.
- Flood damage.
These are all common issues which can be rectified relatively quickly and constitute common improvements and/or maintenance attached to residential properties. They do not constitute structural changes to the dwelling that would mean the building is no longer suitable for use as a dwelling. SDLTM00385 |
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62. But I accept that some defects in what could otherwise be a dwelling or suitable for use as such would mean that it is not so. Defects which make it dangerous to live in fall within that category but such danger must in my view be such that a reasonable person would say ""it's too dangerous to live there"". Some risks to health and safety may fall into this category: high radioactive pollution, the high probability of walls collapsing, and the kind of hazards which would spur a local authority to issue a prohibition notice restricting the use of the premises. Fish Homes Ltd
43. As to (6) whether it could be renovated and occupied as a dwelling is not relevant. The test set out clearly in paragraph 18(1)(a) Schedule 4ZA is whether it was “suitable” to be used as a dwelling at the time of purchase: it is not whether it was capable of becoming so used in the future.” PN Bewley Ltd |
| Fundamental issues with the building
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SDLTM00385: Examples of when a property will be considered not suitable for use as a dwelling include:
- Where repair work cannot be undertaken safely because of high levels of asbestos that cannot be removed without deconstructing the property.
- Where there is high radioactive pollution present.
- Where there is a high probability of walls collapsing.
- Where there are hazards present that would cause a local authority to issue a prohibition notice restricting use of the premises. SDLTM00385
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62. But I accept that some defects in what could otherwise be a dwelling or suitable for use as such would mean that it is not so. Defects which make it dangerous to live in fall within that category but such danger must in my view be such that a reasonable person would say "it's too dangerous to live there". Some risks to health and safety may fall into this category: high radioactive pollution, the high probability of walls collapsing, and the kind of hazards which would spur a local authority to issue a prohibition notice restricting the use of the premises. Fish Homes Ltd
43. As to (6) whether it could be renovated and occupied as a dwelling is not relevant. The test set out clearly in paragraph 18(1)(a) Schedule 4ZA is whether it was “suitable” to be used as a dwelling at the time of purchase: it is not whether it was capable of becoming so used in the future.” PN Bewley Ltd
53. Pulling all of this together, I consider that a building which was recently used as a dwelling, has not in the interim been adapted for another use and is capable of being so used again (a building, such as the one in Bewley, the defects in which cannot be put right at all, will not be capable of being so used) will count as a dwelling, even though it is not ready for immediate occupation, unless the reason/s why it is not ready for immediate occupation are so fundamental (being radioactive or at high risk of collapsing, for example) that the work required to put these problems right goes beyond anything that might ordinarily be described as repair, renovation or “fixing things” (examples of this sort of work being installing a new boiler or heating system, damp problems or floors needing replacing).
54. I accept that the state of the gas and electrics and aspects of the water supply (including the need for a new boiler house roof) made the Property too dangerous for a reasonable person to occupy immediately, but the works required to put those problems right were not fundamental and were much closer to the new boiler/heating system/curing damp/new flooring end of the spectrum than the radioactive house/dangerous structure/potentially collapsing walls end. Mudan |
