What will the budget have in store for SDLT?
Stamp Duty Land Tax (SDLT) concessions granted to first time buyers in the 2010 budget come to an end on 24 March this year. The concession, which meant that first time buyers wouldn’t have to pay the 1% SDLT on properties costing between £125,000 and £250,000 has had a fairly limited impact on the housing market. Employment uncertainties coupled with high mortgage deposit requirements have conspired to keep many first time buyers out of the marketplace.
Ironically, just as the SDLT concession is ending, mortgage lenders have started to move back into offering 95% mortgages. Perhaps spurred on by the Government’s FirstBuy scheme which starts in April, within the last week lenders such as the Ipswich, Newcastle and Leeds building societies have all come out with a 95% mortgage offering. The Government scheme gives first time buyers access to 95% mortgages on new build properties bought from certain developers.
Those within the higher house or commercial building price bracket are awaiting the forthcoming budget with interest. The top rate of SDLT is currently 5% for properties in excess of £1million. Last year’s Budget brought us a change in the SDLT calculation applicable to bulk-buy purchases, effectively putting bulk purchasers on the same footing as individual purchasers. This single change highlighted the importance of carefully planning property transactions not only to avoid paying excess SDLT but also to maximise tax advantages on transfer or disposal.
The pre-Budget rumour mill has already started. Earlier in January Exchequer Secretary, David Gauke, told the London Evening Standard that “people buying high-value properties must also pay their fair share. We’re looking at this area to see what more can be done.” This has led to various speculations about what changes, if any, the Government may bring in as part of the 2012 Budget. In the meantime first time buyers looking to take advantage of the current reliefs have until the 24 March to complete their purchase.
As tax mitigation specialists Newshams are able to give advice on tax matters, how tax may affect any private or business transaction and how to put in place an effective mitigation strategy.
Contact us now on 020 7470 8820 and ask to speak to a tax adviser about how we can mitigate your tax costs or e-mail us at email@example.com and we’ll get straight back to you.
02 February 2012
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