Dominic owns a flat which is his main residence. Dominic works as a joiner and wants to build his own home so he buys part of a farmer’s field for £80,000. Although the land has planning permission for a residential property, no building work has commenced nor does it have any existing structures on it.
Dominic will not pay ADS on this purchase as the land he is buying will not be considered as a dwelling. Although he intends to build a dwelling on it, the use of the property at the effective date of the transaction overrides any past or intended future uses.
However, land may be considered as a dwelling if at the effective date a residential building is being built on it, or if a contract exists for a builder to construct a dwelling on it i.e. off-plan property.