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Release date: October 2009
When the Chancellor of the Exchequer announced a Stamp Duty Land tax holiday on residential properties priced up to £175,000.00, he stated that it would end on 3rd September 2009. He has now decided that this will continue until 31st December 2009.
The previous "disadvantaged property relief" for properties in designated disadvantaged areas is suspended until 1st January 2010.
To find out whether the property that you are buying is in a disadvantaged area go to www.hmrc.gov.uk and through the a-z search facility go to Stamp Duty and then click the "tools" link to Disadvantaged Area relief postcode search.
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From 1st January 2010 the SDLT thresholds for freehold residential property will revert to:- |
| £0 to £125,000 |
0% |
| For disadvantaged areas: |
| £0 to £175,000.00 |
0% |
| £125,001 to £250,000 |
1% (until 31st December 2009 £175001 to £250,000 1%) |
| £250,001 to £500,000 |
3% |
| £500,001 and above |
4% |
For Residential leasehold property the matter is more complex and the SDLT is calculated by reference to the premium paid for the property and the ground rent payable under the lease (see below for "Net Present Value")
| For commercial freehold property the thresholds remain as follows;- |
| £0 to £150,000.00 |
0% |
| £150,001 to £250,000 |
1% |
| £250,001 to £500,000 |
3% |
| £500,001 and above |
4% |
But beware, if VAT is payable on the purchase price, then the Stamp Duty Land Tax is payable on the total price including VAT. For leases on commercial property, it is far more complex. You must first ascertain the Net Present Value of the rental during the term. To calculate the SDLT go to www.hmrc.gov.uk and click on the link for SDLT calculators. Once again, if VAT is payable on the rent then the SDLT is calculated on the basis of rent plus VAT.
For advice on commercial property, please contact David Hogg or Malcolm Woolfe on 01325 466461 or david.hogg@close-thornton.co.uk, malcolm.woolfe@close-thornton.co.uk
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