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The Chancellor announced on 16 March 2016 in his budget that slab rates of stamp duty land tax (SDLT) have been abolished for non-residential properties, as they were for residential property in 2014.

Non-residential transactions include transactions involving a mixture of residential and non-residential properties.

The following rates for non-residential properties will apply for completed transactions on or after 17 March:

·         Zero rate band on purchases up to £150,000

·         2 % on purchases between £150,001 and £250,000

·         5 % on purchases above £250,001

It is more likely that the purchasers of non-residential property with upfront payment worth more than £150,000 will be affected by new legislation changes.

These changes will cut the tax that many businesses pay when purchasing non-residential property, whilst ensuring those purchasing the most expensive non-residential properties make an important contribution to tackling the deficit.

However, where contracts have been exchanged before 17 March but complete on or after that date, the purchaser can choose whether to pay tax under the old or the new rules.

Overall, these changes are not expected to have any significant macroeconomic impacts, as it will only affect those individuals and households who purchase non-residential property. Also the costing takes into account impact on the frequency of transactions. For transactions where the tax charge is lower than the previous SDLT system there is an expected increase in the volume of transactions.

For further information please contact Helen Washington on h.washington@wjclaw.co.uk