Budget 2016- Commercial Stamp Duty Changes Announced:March 18, 2016
The Chancellor, in the budget update (16/03/2016), has extended his reform for residential property to the commercial sector by overhauling commercial stamp duty land tax . A zero rate band has been introduced and the new rates apply from midnight tonight increasing SDLT on the highest value commercial property , while cutting it lower down.
New SDLT rates for commercial property are :
Up to £150,000 0%
£150,001 to £250,000 2%
Above £250,000 5%
Importantly, the rates will only apply to the portion of the price that it falls into so no longer employing the “slab”system whereby the same tax rate was applied on the whole value of the property.
There will also be a 2% rate for those high value leases with a net present value above £5m.
There are transitional rules for purchasers who have exchanged but not completed before midnight.
Further, from 1 April, an extra 3% levy will now be applied to standard stamp duty land tax rates on all purchases of additional residential property above £40,000, such as buy-to-let properties and second homes.
Patricia Cronin, Associate, Property