This week the government announced new stamp duty rates commercial property in the UK, but who will benefit and who will lose out?
Property Developer Richard Carr believes this is another example of the government using the stamp duty to tax raid the industry. As with CIL and s106, Richard believes the government should be relaxing tax not making it more expensive.
According to propertywire.com, investors in large commercial property in the UK will see a rise in stamp duty rates, whereas buyers of smaller properties will benefit from a reduction in the tax payable.
As of today (March 17th) stamp duty will no longer be applied to the whole transaction fee, but to bands based on a portion of the fee.
- The new rates will be 0% on commercial property transactions up to the value of £150,000
- 2% between £150,001 and £250,000
- 5% on anything above £250,000
As a result, buyers of commercial property up to the value of £1.05 million will benefit and pay less in stamp duty.
Despite this, opinion on the pros and cons of the new calculation is divided.
According to the British Property Federation (BPF) it is not all good news. “Commercial property investment can often act as the catalyst for regional growth and as the economy has recovered investment has been spreading out from London to the UK’s regions, but will now undoubtedly slow,” said Melanie Leech, BPF chief executive.
“The real set back is that development in places like the Northern Powerhouse and Midlands’ Engine will now be held back as a result of this out of the blue raid on commercial property transactions,” she explained.
Mark Tighe, managing director of capital allowances tax specialists Catax Solutions, believes the new tax bands will drive demand.
“Capital allowances are a highly valuable tax relief available to owners of commercial property but under current legislation they are irrecoverable if they are not identified and realised at the point of sale,” he explained.
Warning: include(/index.php): failed to open stream: No such file or directory in /homepages/9/d542973572/htdocs/app542974576/wp-content/plugins/social-share-button/includes/class-shortcodes.php on line 41
Warning: include(): Failed opening '/index.php' for inclusion (include_path='.:/usr/lib/php7.0') in /homepages/9/d542973572/htdocs/app542974576/wp-content/plugins/social-share-button/includes/class-shortcodes.php on line 41