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Wednesday, March 16, 2016

Additional Rate Stamp Duty(ARSD) Confirmed

So.... today's Budget.

The 3% Additional Rate Stamp Duty(ARSD) Confirmed

Osborne confirms the 3% Stamp Duty surcharge on second homes, publishing the response to the consultation doc: Higher rates of Stamp Duty Land Tax (SDLT) on purchases of additional residential properties .

In response to 'The proposed exemption for large scale investors', Osborne has confirmed - they won't be. 

After consideration, the Government line is -

'evidence suggesting that in the absence of an exemption there would be an adverse and material effect on housing supply is not compelling. '

So all property investors, great and small will be subject to the 3% Stamp Duty surcharge on second homes.

Those buyers who own property outside England, Wales or Northern Ireland, will find themselves subject to the surcharge when buying a home in E, W of NI. 

Obviously, this will not occur in reverse, so those of you looking to buy their 'Escape to the Sun' property will not be faced by these surcharges, just those taxes under that country's specific jurisdiction. 

Buyers will have 36 months to dispose of a property if they are in the process of buying and selling their primary residency, leaving them with two or more properties at the end of the day of the transaction as part of the moving process.

To avoid the surcharge property purchases need to be completed before midnight on 31st March 2016.

Any transactions where contracts were exchanged before 25th November 2015 will not be liable either, even if their completion falls after the  April 1st deadline.

Osbourne hopes his ARSD will generate £3.7 billion for the Treasury over the next five years.

Some other budget news

New £1,000 allowance for the sharing economy

It's good to share, and even better now, thanks to two new tax-free £1,000 allowances starting from April 2017.

Firstly, and the one that most relates to landlords, involves income from property, such as renting a driveway or loft storage. – £1,000 will be tax free, although the presumption would be the landlord would have to have the property classified as their primary residence.

The second £1,000 tax-free allowances relates to selling goods or providing services - such as sharing power tools (and many landlords have an array of tools and machines acquired over the years, lift sharing ( not so relevant) or selling goods they have made.

New stamp duty rates for commercial property 

Starting from 17th March 2016, the calculation for stamp duty on freehold commercial property and leasehold premium transactions will change.

Rates will now apply to the value of the property over each tax band, at 0% for the portion of the transaction value up to £150,000; 2% between £150,001 and £250,000, and 5% above £250,000.

Buyers of commercial property worth up to £1.05 million will pay less in stamp duty.

Stamp duty rates for leasehold rent transactions will also change with a new 2% stamp duty rate on leases with a net present value over £5 million.

Download all the Budget 16 documents

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Anonymous said...

Oh for heavens sake - will 3% extra on a buying price REALLY stop you buying a property for btl if you relly want to buy it? It won't affect me!

Hopefully the money raised [and how much we as a country need it] will go to hospitals education and so on ...

Hawkeye said...

That's the spirit anonymous!