New stamp duty rates on commercial property come into effect on 17th March, following the announcement made by Chancellor George Osborne in the 2016 Budget on Wednesday 16th March.
From the 17th March, businesses will pay rates only on the portion of value that sits within each bracket, rather than paying the rate that the total property value sits in. The reform is an unwelcomed move for large investors who could see stamp duty increase significantly, but good news for smaller property investors who will see rates decrease.
George Osborne explained yesterday “If you buy a pub in the Midlands worth, say, £270,000, you would today pay over £8,000 in stamp duty. From tomorrow you will pay just £3,000.”
Stamp duty on leasehold rent transactions is also set to change with a new 2% rate on leases with a net present value of £5million.
It is claimed that the reform will raise an extra £500million in tax and only negatively affect 9% of transactions.
Commercial Property Stamp Duty Rates
£0 – £150,000: 0%
£150,001 – £250,000: 2%
For more information on how the stamp duty reform might affect you please contact a member of our agency team.