Scrutton Bland Property Newsletter Summer 2017

Rethink of STAMP DUTY LAND TAX (SDLT) for property developers

The additional 3% SDLT rate for purchasing residential property sites has exacerbated the already high cost burden for a large number of property developers. This change has particularly impacted those developers who are involved with the redevelopment or conversion of existing houses.

B ased on a purchase of a £550,000 land or farm land or other non-residential elements such as farm buildings, or redundant office buildings or even short term furnished holiday lets. With these aspects in mind, consideration should be given from an SDLT perspective as to whether the site being acquired is a mixed use site. If the site is acquired as a mixed use site, SDLT applies based on the non-residential rates. These are set out below:- residential site, a developer could be paying SDLT of £34,000 based on current SDLT residential rates. Many of these houses or sites have land with them, such as paddock

If the site being acquired is not capable of being regarded as a mixed use site, and the site includes a number of buildings which are capable of being separate dwellings, a developer may be eligible to claim multiple dwellings relief. For example, if a building comprising 3 flats is acquired for £600,000, the SDLT liability could be reduced from £38,000 to £18,000 by making a claim for multiple dwellings relief. In some cases it may be possible to claim a refund of any overpaid SDLT from HMRC for transactions which have already completed by submitting an amended SDLT return or, if outside of the requisite time limits, by making an SDLT overpayment relief claim. How we can help Scrutton Bland’s property tax specialists can:- • review any previous property transactions for you to determine if you are eligible for a refund of SDLT; • make any SDLT reclaims on your behalf; or • advise you on the impact of the SDLT rules on new or prospective transactions Gavin Birchall , is a Tax Partner at Scrutton Bland and leads its property and construction sector group. Contact him at gavin.birchall@scruttonbland.co.uk or 01206 838464 .

Band: market price £ Non-residential 0-150,000 0% 150,001 - 250,000 2% Over 250,000 5%

Applying these rates to the purchase of a £550,000 mixed use site, would result in an SDLT liability of £17,000 (compared to £34,000 for a “residential” site).

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