<p data-pm-slice="1 1 []">Section 116(1) of the Finance Act 2003 defines a residential property as a building that is suitable for use as a dwelling […].  A non-residential property is anything that falls outside of this definition.</p>
HMRC acknowledged the ground floor was used commercially, but stated the question at hand was whether the building was residential property on the basis that, in conjunction with the two upper floors, the ground floor was “suitable” for use as a dwelling.

HMRC’s Internal Manual (SDLTM00390 &amp; SDLM00295) suggests mixed-use applies when a building containing residential dwelling has separate areas, one or more of which is adapted for commercial or business use.

The Tribunal held the two staircases connecting the ground floor to the first floor and the main entrance through which all floors could be accessed meant a lack of separation for mixed-use purposes.

Additionally, the fact that the garage was being used commercially did not make it unsuitable for residential use. A large part of its commercial use was storage for products. The Tribunal highlighted there was no reason why the space could not be used to store personal items for residential use.

The historic commercial use of the building was also of little importance as the renovations in 2019 drastically changed the character of the building. Furthermore, the floor plans Showed the garage being labelled as a “gym” and for storing gym equipment. This allowed the Tribunal to infer it was used as a personal home gym. Whether or not Mr Stephen used it as such was irrelevant.