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Stamp Duty changes confirmed in the Budget
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
There is no be no U-turn on the 3% Stamp Duty surcharge on additional properties, the Chancellor confirmed in today’s Budget.
Instead, Mr Osborne said that receipts generated would assist people getting on the ladder in the South West.
Commercial changes
In addition, the Chancellor announced alterations to Stamp Duty Land Tax on commercial property, which will come on from midnight tonight.
Mr Osborne said, ‘just over a year ago, I reformed residential stamp duty. We moved from a distorted slab system to a much simpler slice system. As a result, 98% of homebuyers are paying the same or less and revenues from the expensive properties have risen. The IMF have welcomed the changes and suggest we do the same for commercial properties. That is what we are going to do and in a way that helps our small firms.’[1]
‘At the moment our small firms can pay just £1 more for a property a face a tax bill three times as large-that makes no sense,’ he added.[1]
From mindnight tonight, stamp duty on commercial property will have a zero rate band for purchases up to £150,000. This rises to a 2% rate on the next £100,000 and a 5% top rate above £250,000.
Stamp Duty changes confirmed in the Budget
Driving demand
Mark Tighe, managing director at capital allowances tax specialists Catax Solutions, noted, ‘the reduced stamp duty payable on commercial property announced by the Chancellor will doubtless drive demand in this key asset class in the months and years ahead.’[1]
Tighre continued by saying, ‘the resultant increase in transactions, among both businesses and private individuals buying commercial property, will potentially cost billions as a largely unused tax relief is lost forever. Capital allowances are a highly valuable tax relief to owners of commercial property but under current legislation they are irrecoverable if they are not identified and realised at the point of sale.’[1]
‘Currently, very few commercial property owners, along with their accountants and lawyers, are aware of unused capital allowances tax reliefs. Therefore as transaction levels increase in volume and momentum, commercial property owners are set to lose significant tax rebates to the tune of thousands, tens of thousands or even hundreds of thousands of pounds,’ Tighe concluded.[1]
[1] http://www.propertyreporter.co.uk/finance/stamp-duty-hike-confirmed-by-chancellor.html
