Thursday 31st March 2011
I wrote about Stamp Duty Land Tax last year – I know it is never a popular subject but with the recent Budget I thought it worthwhile revisiting the tax you might have to pay when purchasing land or property. Stamp Duty Land Tax (SDLT) is generally the main tax to think about.
What are the rates of SDLT?
SDLT rates vary on different types of property and the value of the transaction.
The starting threshold is still currently £125,000.00 and assuming you are buying a residential house the current rates are:
Up to £125,000.00 – Zero
£125,001.00 - £250,000.00 – 1%
£250,001 - £500,000.00 – 3%
£500,001.00 and above – 4%
From 6th April 2011 transactions over 1 million - 5%
Note: some postcodes qualify for a higher starting threshold of £150,000.00 and there are some extra considerations if you are buying a new residential lease.
What if I am a First Time Buyer?
• There is still at this time a First Time Buyer relief for purchases up to £250,000.00, meaning there will be no tax to pay on purchases up to and including that price but over that price, the rates above will still apply.
• Please note however that the First Time Buyer incentive was previously expected to last until 24 March 2012 but it has been announced that there is currently a review of this incentive and the outcome is expected to be announced in the autumn – whether that is a review to extend the incentive or end it is not known!
• You will need to ensure you satisfy certain conditions to be classed as a ‘first time buyer’ – you must never have owned or part-owned any land or property anywhere in the world prior to the transaction. If it is a purchase by more than one person, you will only qualify if all of you satisfy this condition.
Your solicitor and/or tax adviser will be able to give you specific advice on all of the above for your particular transaction. SDLT rates differ from the above for non-residential or mixed use properties (part residential and non-residential) and further advice should be taken from a commercial property solicitor and/or your tax adviser.
By Dawn Patterson, Associate Solicitor at Glanvilles and PPA committee member.
Tel. 023 9249 2300
Email. d.patterson@glanvilles.co.uk
February 2011
