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Stamp Duty Changes - Alistair Bertrand, Chebsey & Co

Stamp duty changes

Stamp Duty Land Tax (SDLT) is usually payable when you buy or lease land or property. It’s also sometimes payable on transfers of ownership of property or land.

The Chancellor announced in the budget earlier this year changes to SDLT which affects first time buyers and higher value purchasers.

In the budget the Chancellor announced a relief on SDLT for first time buyers of residential property for a value of up to £250,000. Before this, SDLT was payable for properties purchased with a value between £125,000 and £250,000. SDLT was payable at a rate of 1% of the price for such transactions. The relief will mean that first time buyers will be able to buy a residential property up to a purchase price of £250,000 without paying SDLT.

The relief will be in place until 25 March 2012. There are conditions attached to the relief including:

- The property is a residential property.

- The purchase price must not exceed £250,000.

- The purchaser must intend to occupy the property as their only or main residence.

- The purchaser or purchasers must not have owned property anywhere in the world and if there is more than one purchaser then all of them must not have owned property anywhere else in the world, this could for example include an inherited property that was transferred into the purchaser’s name.

- The purchaser cannot be a corporate body, partnership or trustee.

- The transaction must not be linked to any others.

- There must be an acquisition of a major interest in land; the interest purchased must be a freehold property or a lease with at least 21 years to run.

The Chancellor also announced that SDLT would increase for any property worth over £1,000,000. This will be implemented in the Finance Bill 2010 and it will take effect from 6 April 2011. At present SDLT is payable at a rate of 4% where the consideration exceeds £500,000. From 6 April 2011 properties purchased for over £1,000,000 will have to pay SDLT at a rate of 5% of the purchase price.

The other rates have not changed.

Of course all this could change after the upcoming election and we will provide an update if it all changes!

Alistair Bertrand

Alistair is a commercial and residential solicitor. He can be contacted at Chebsey & Co, 51 London End, Beaconsfield, HP9 2HW


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