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Budget 2016: SDLT changes for business property and investors

By Melanie Greer-Walker

Are you a winner or a loser?

On March 16th the Chancellor announced sweeping changes to stamp duty land tax (SDLT) payable in respect of commercial property and residential property bought for investment. 

The key changes are:

  • From 1st April the new 3% SDLT surcharge will apply to all purchases of residential property by companies.
  • There will be no exemption from the surcharge for “large scale” investors despite lobbying against this.
  • Purchases of commercial property will be subject to a new sliding scale of SDLT instead of the old fixed rates.  The new top rate of tax is 5% - 25% higher than the old rate of 4%.  This is now in force.
  • SDLT on new very high value leases will increase.  Leases with a net present value of rent over £5 million will suffer a new 2% tax rate – the previous rate was 1% for NPV over £150,000.

For our clients investing in residential property the new SDLT rate needs to be costed into a purchase from the outset of a purchase.

However for purchasers of commercial property under c. £1m there are SDLT savings to be had, and no change on smaller leases.  Good news for small businesses.

Anyone buying commercial property over £1m or taking a lease with a value of over £5 will be hit with a bigger bill.

SDLT is an increasingly complex area, with a lot of money at stake.  If you are thinking of buying or leasing commercial or investment property please call us on 0208 7686869 so we can guide you through the process and help you make the right decisions for your business.

Melanie Greer-Walker is a specialist commercial property solicitor with over a decade of experience in the City and South London.

Quality Solicitors Amphlett Lissimore is actively involved in the fast moving property market in Crystal Palace, Bromley, Croydon, Beckenham, Orpington and the surrounding areas as well as within Central London.

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