At budget on 16 March 2016, the Chancellor of the Exchequer announced a change to the way stamp duty land tax (‘SDLT’) is calculated for non-residential property transactions which complete on or after 17 March 2016.
Non-residential transactions include transactions where there is a mixture of non-residential and residential property. The reform does not affect purchases of residential property.
On or after 17 March 2016:
From 17 March 2016, a new 2% rate will be introduced for transactions with a net present value (NPV) above £5 million.
Subject to transitional rules, the following rates of SDLT will apply to freehold transactions, lease premiums and lease assignments that complete on or after 17 March 2016:
Chargeable Consideration Rate
Where contracts for the purchase of a property where exchanged before 17 March 2016 but the contract completed on or after that date, purchasers can choose not to apply the new rules and so pay SDLT under the old rules. There are exclusions to this rule.
From 17 March 2016, a new 2% rate for rent paid under a lease with a NPV of above £5 million will apply. The new rates are as follows:
NPV of Rent Rate
Please contact our Commercial Property team for further information.