A recent tax tribunal case has confirmed that an individual was liable to CGT on an off-plan property sale throughout their period of ownership, notwithstanding that part of the period included a time when the property had not yet been built. This ruling confirms that private residence relief turns on occupancy and that, broadly speaking, purchasers will only qualify for PPR for those periods of actual occupation. This ruling is significant for those who buy off-plan properties because it may be some years before the property is built and the new owners can move in.
This ruling may not help to calm the nerves of the shareholders of some of the UK's largest housebuilders, whose share prices have all wobbled in the last few days following Teresa May's announcement that the Government intends to introduce a new SDLT surcharge on non-UK resident purchasers.
In a ruling on 26 September 2018 the Upper Tribunal decided HMRC was right to apply the tax to the whole period of ownership of a person's property from the moment he bought it off plan.