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I am in the process of purchasing some of a neighbour's garden to extend the garden of my main (and only) residence. The purchase price is well below the SDLT threshold but I cannot find any official HMRC guidance on whether the 3% surcharge would apply to this.

Logic would state that it would not apply as it wouldn't apply to future buyers of the house and gardens but, then again, they would pay SDLT on the extra value it adds to the existing house and garden.

I have found this article from 2020 which says:

If buying land from the ‘garden or grounds’ from the homeowner, but not the dwelling itself (i.e.- this is retained by the homeowner), the residential rates will apply, however there will NOT be any 3% surcharge if the dwelling is not also being purchased.

Can anybody point to the official HMRC guidance on the rules as at Mar 2024?

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  • To half answer my own question, the 3% surcharge only applies on purchases of more than £40,000 so it should not apply in my case. That said, I am interested in what would happen if the land cost more than £40,000
    – phil-lavin
    Commented Mar 10 at 11:15

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I suspect that these points may be related to what you are looking for:

The HMRC page aimed at the public Guidance Higher rates of Stamp Duty Land Tax says

Property

Do not include property (or part of a property) if any of the following apply:

  • the property is worth less than £40,000

The HMRC internal manual SDLTM09750 - SDLT - higher rates for additional dwellings: Meaning of 'dwelling' - general - Para 18 Sch 4ZA FA2003 says

Example

An individual buys a plot of garden land from their neighbour. The purchase does not include an interest in one or more dwellings. The purchase is not a “higher rates transaction” and the higher rates of SDLT will not apply to the transaction.

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