NPPR on new builds
The Conveyancing Committee has been asked to provide guidance on what should be provided by a builder/developer on the sale of a ‘residential property’ (as defined in the Local Government (Charges) Act 2009), the construction of which was completed or even started after 31 March 2013, being the last liability date for the NPPR charge. of the act defines a residential property as a building used or suitable for use as a dwelling. Clearly, a residential property that did not exist or was not suitable for use as a dwelling by reason of being in the course of construction on a liability date to which the act applied cannot be liable to the NPPR charge. The problem – from a practical point of view for a vendor, on a subsequent sale of the property – is establishing that the property was not liable to the NPPR charge.
It is the view of the committee that the original builder/developer should provide, on closing, a statutory declaration confirming that the property is not a ‘residential property’, confirming as appropriate:
- That the building was not a relevant residential property because construction of the building was completed or indeed, if appropriate, commenced after 31 March 2013, or
- If the property was completed by 31 March 2013, that the building formed part of the trading stock of a business from which, since its construction, no income has been derived, and which has not at any time since its construction been used as a dwelling.
The declaration should be placed with the title documents to avoid having to trawl through documents at the time of future sales to provide evidence that the NPPR charge does/did not apply.