08 April 2010 #Commercial Real Estate
The Government announced a new Stamp Duty Land Tax (SDLT) rate of 5% for purchases of residential property where the consideration exceeds £1m. The effective date of this change will be on or after 6 April 2011. In this respect "the effective date" means the date of legal completion.
All other SDLT rates and thresholds remain unchanged save for the "holiday" referred to below.
It has been announced that first time buyers will be entitled to this "holiday" and the relief will apply where ALL of the following conditions are met:
At present the SDLT rate for a purchase of residential property where the consideration is more than £125,000 but not more than £250,000 is 1% and applies to all buyers.
Whilst this "holiday" appears to be good news for buyers it is understood that a number of first time buyers are still struggling to raise the deposits which are now required by the major lenders before they will issue a mortgage offer.
It would appear that the Government is hoping that any significant reduction in revenue attributable to this "holiday" will be off-set by the rise in the SDLT rate of 5% for properties worth in excess of £1m.