Stamp Duty Land Tax (SDLT) changes for commercial property
By Fenella Eddell
In the 2016 Budget the Chancellor announced a major overhaul of the Stamp Duty Land Tax (SDLT) regime for non-residential properties.
From 17th March 2016, SDLT will be payable on a “slice” basis, paralleling the changes made last year in relation to residential property transactions. A different rate of charge will apply to the portion of the purchase price falling within each band, as follows:
- £0 – £150,000: No SDLT payable
- £150,001 – £250,000: 2%
- £250,001+: 5%
The 5% bracket is a significant change from the previous 4% highest bracket. As a result, commercial property purchasers buying for more than £1,050,000 will be paying more SDLT.
In addition, on new leasehold transactions, a new 2% rate will apply where the value of rent payable over the term of the lease (the “net present value”) exceeds £5,000,000. The previous rate of 1% will continue to apply below this.
Fenella Eddell is a solicitor in the property department at Barker Gotelee, Suffolk solicitors.