Â 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
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 –
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?
â€¢ 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.
â€¢ 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!
â€¢ You will need to ensure you satisfy certain
conditions to be classed as a â€˜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.