LBTT4012 - Meaning of non-residential property and treatment of ‘mixed’ property

LBTT guidance on the meaning of non-residential property for the purposes of LBTT, including guidance on the treatment of ‘mixed’ property.

Non-residential property means any property that is not residential property. Undeveloped land is essentially non-residential but may be residential property if, at the effective date, a residential building is being built on it.

In addition, where six or more separate homes are the subject of a single transaction or a grant of a lease over them, then those homes are treated as non-residential property (subject to multiple dwellings relief – see LBTT3015).

Property in a land transaction is non-residential if:

  • the main subject-matter of the transaction consists of or includes an interest in land that is non-residential property; or
  • the transaction is one of a number of linked transactions and the main subject-matter of any of these transactions consists of or includes such an interest.

Buildings used for the following purposes are non-residential property:

  • a home or other institution providing residential accommodation for children;
  • a hall of residence for students in further or higher education;
  • a home or other institution for persons in need of personal care due to old age, disability, past or present dependence on alcohol or drugs or past or present mental disorder;
  • a hospital or hospice;
  • a prison or similar establishment; or
  • a hotel or inn or similar establishment.

Where a building is used for one of these purposes, no account is to be taken of the suitability of its use for any other purpose.

‘Mixed’ property transactions

A transaction where there is a mixture of residential and commercial interests (for example, a landed estate or a shop with a flat above it) is treated as a non-residential transaction and will therefore be subject to the non-residential LBTT rates and bands (see LBTT4011).

All land transactions will be treated on their own merits, including those involving property such as bed and breakfast establishments or guest houses. However, a bed and breakfast (B&B) establishment which has bathing facilities, telephone lines etc. installed in each room and is available all year round would normally be considered non-residential.
Where a building that is not in use could be used for at least one of the purposes listed for residential property in LBTT4010 and at least one of the purposes listed above for non-residential property, then if there is one use to which it is most suitable or if all the uses are on one of the lists of uses, then no account is to be taken of its suitability for any other use. If this is not the case, then the building is to be treated as suitable for use as a dwelling, and accordingly treated as residential property.

LBTT(S)A 2013 section 24

LBTT(S)A 2013 section 59

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