First Time Buyers, Stamp Duty Land Tax

First Time Buyers and Stamp Duty Land Tax and Minor Amendments to Higher Rates

The Chancellor of the Exchequer has announced several changes to Stamp Duty Land Tax in today’s budget.  To keep our clients informed and up to date, below is a summary of the key points.

Stamp Duty Land Tax: Relief for first time buyers

A relief for first time buyers of residential properties costing no more than £500,000. First time buyers will pay no SDLT on the first £300,000 of the purchase price, with the remainder being charged at 5%. No relief will be available where the total consideration exceeds £500,000.

The relief is not time limited and will apply to transactions with an effective date on or after 22 November 2017. Legislation will be introduced in Finance Bill 2017 to 2018.

A guidance note is available on, together with the draft legislation and explanatory note.

First time buyers can use the calculator to work out their stamp duty land tax liability.

Stamp Duty Land Tax: Minor amendments to higher rates

Minor amendments to provide relief in certain cases including –

  • where a divorce related court order prevents someone from disposing of their interest in a main residence,
  • where a spouse or civil partner buys property from another spouse or civil partner,
  • where a deputy buys property for a child subject to the Court of Protection,
  • where a purchaser adds to their interest in their current main residence.

Additionally, legislation will be provided to prevent abuse of relief for replacement of a purchaser’s only or main residence by requiring the purchaser to dispose of the whole of their former main residence and to do so to someone who is not their spouse.

The changes will apply from 22 November 2017. Legislation will be introduced in Finance Bill 2017 to 2018.

ATED: 2018 to 2019 annual chargeable amounts

The ATED annual charges will rise 3% from 1 April 2018 in line with the September 2017 Consumer Prices Index. A Treasury Order confirming the charges will be published shortly after Budget.

The new rates will be –

Property Value Annual chargeable amounts for the 2017 to 2018 chargeable period Annual chargeable amounts for the 2018 to 2019 chargeable period
£500,001 to £1,000,000 £3,500 £3,600
£1,000,001 to £2,000,000 £7,050 £7,250
£2,000,001 to £5,000,000 £23,550 £24,250
£5,000,001 to £10,000,000 £54,950 £56,550
£10,000,001 to £20,000,000 £110,100 £113,400
£20,000,0001 and over £220,350 £226,950

Great news for First Time Buyers

The changes apply from today so any first time buyer purchasing a property and completing from today will not have to pay Stamp Duty Land Tax if they are purchasing the property for £300,000 or less.

The calculator referred to earlier is a very helpful online tool but please do not hesitate to contact Gaddes Noble Property Lawyers if we can be of any assistance with the new rates of SDLT.

Commercial property, stamp duty land tax

Commercial Property and Stamp Duty Land Tax

Since the introduction of the controversial 3% Stamp Duty Land Tax (SDLT) on second residential properties we have seen a sharp increase in our investor clients purchasing commercial property and land.

The purchase of a second residential property generates SDLT of 3% on the purchase price.  This applies to any residential property over £40,000.00 so if you purchased at £100,000.00 you would pay £3,000.00 in SDLT.

Our clients are being creative in a variety of ways, for example purchasing:

  1. Open land with a view to developing and building on the land
  2. Commercial property, for example a shop, to then convert into residential apartments
  3. Derelict commercial property to demolish and use the land for residential development

These scenarios would not generate the additional SDLT on completion and would result in the investor/developer eventually owning more residential property.

HMRC give a definition of non-residential property which includes:

  • Commercial property, e.g. shops or offices
  • Agricultural land
  • Forests
  • Any other land or property which is not used as a residence
  • 6 or more residential properties bought in a single transaction

They also define a ‘mixed use’ property is one that has both residential and non-residential elements, e.g. a flat connected to a shop, doctor’s surgery or office.

Commercial Property Service

As part of our service to you, we complete all necessary Stamp Duty Land Tax forms and ensure that you pay the correct rate on your transaction.  This applies to commercial leases as well as the purchase of a commercial property.

For commercial leases, we act on behalf of Landlords and Tenants.

  • With a Landlord client we usually meet at the outset and discuss the Heads of Terms, we then draft the commercial lease and send this to the Tenants solicitor for approval.
  • With a Tenant client we ensure the Heads of Terms match the draft Lease provided and advise the client on the various clauses and legal terms. We’ll submit searches for a Tenant client where necessary and we also advise at the outset on the SDLT payable upon completion.

We have experience in acting for clients selling, buying and leasing shops, hotels, public houses and warehouses.

We can also advise on investment purchases with a return which can includes the purchase of a room in student accommodation, the purchase of a room in a care home and the purchase of a room in a hotel.

Please contact us for a free initial consultation for all your commercial property conveyancing legal requirements.