Partner Article

Government announce Stamp Duty 'holiday'

With Watson Burton LLP Law Firm

On 2 September 2008, The Treasury announced that there would be an exemption to Stamp Duty Land Tax (SDLT) for land transactions involving purely residential property where the value is up to £175,000.

The relief will apply to any acquisition of a major interest in land for SDLT purposes, which in England and Wales applies to:-

1. Purchase of a freehold interest where the purchase price is less than £175,000 (ie. The purchase of a house), and
2. The assignment of a lease with 21 years or more to run or the grant of a lease for more than 21 years and the purchase price is less than £175,000. (ie. The purchase of a new build flat from a housebuilder or from an existing Tenant)

The new measures will apply to eligible transactions made between 02 September 2008 and 03 September 2009. Prior to this exemption, SDLT at a rate of 1% was payable on the price of residential properties valued between £125,000 and £250,000. For one year, the 1% SDLT rate will apply to properties valued between £175,000 and £250,000.

The raised threshold is therefore intended to benefit first time homebuyers in particular, as the average UK residential property is currently £164,000. However, property buyers in Greater London and the South of England will benefit less than in other regions, as their average property prices greatly exceed the £175,000 threshold.

Purchasers of properties worth more than £250,000 will continue to pay 3% in SDLT, while transactions of properties of more than £500,000 will still attract SDLT at the rate of 4%.

If you have any comments or questions about this article or any property related matters, please contact Mark Lennon of Watson Burton LLP at mark.lennon@wastonburton.com.

This was posted in Bdaily's Members' News section by Ruth Mitchell .