TT123: Stamp Duty Land Tax Changes
Some weeks ago it was leaked to the press that the Government was planning changes to Stamp Duty Land Tax (SDLT) to boost the housing market. This rumour almost paralysed an already badly weakened market as first-time buyers waited for further news.
Finally, on 2 September 2008, the Government announced a temporary relief from SDLT on purchases of residential properties of £175,000 or less in value. This commenced on 3 September 2008 and will last until 2 September 2009.
Previously the exemption limit was £125,000.
Buyers of properties between £125,000 and £175,000 thus save between £1250 and £1750 compared to what they would have paid last month.
Oddly this brings the new threshold higher than not only the old threshold, but higher than the £150,000 threshold for properties in areas defined as disadvantaged. It is believed that this special threshold for disadvantaged areas will remain in place when the current special increase comes to an end.
It remains to be seen what the impact of this change will be as first-time buyers assess the value of this saving in the context of a falling market. Furthermore, in the South East most properties are valued above the threshold, so the benefits will be mainly enjoyed elsewhere.
Barnes Roffe Topical Tips:
- The new £175,000 threshold only applies to residential properties.
- The old £150,000 threshold remains for non-residential properties.