My son is looking at buying a small derelict pub in East Anglia. He plans to live in the pub and convert it into a home for himself. It will never be reopened as a pub. Assuming he gets planning permission for the conversion of the pub into a residential unit, would he be able to claim stamp duty land tax (SDLT) first-time buyers’ relief on the cost of the pub (which is under £500,000)? 

Arthur Weller replies:  

First-time buyers' relief from SDLT applies when a person buys a 'dwelling' with the intention to occupy the dwelling as their only or main residence (see HMRC’s Stamp Duty Land Tax Manual at SDLTM29811). In its guidance at SDLTM29851, HMRC states: ‘The meaning of dwelling includes a building or part of a building that is used or suitable for use as a single dwelling or is in the process of being constructed or adapted for use as a dwelling.’ It is questionable whether your scenario fits into this definition. See also HMRC’s guidance at SDLTM00400. However, it may bebetter if this derelict pub is not defined as a dwelling, even if it means foregoing first-time buyer's relief because then, perhaps, you might be eligible to pay non-residential rates of stamp duty land tax. This is a point you may wish to consider further, preferably with professional advice.