New stamp duty rates on commercial property are set to be introduced from 17 March 2016.
Announced by the Chancellor George Osborne at his Budget 2016, the way stamp duty is applied on commercial properties and leasehold rent transactions will change.
The new rates include a 0 rate band on property purchases up to £150,000. This will rise to 2% between £150,001 and £250,000, and 5% above £250,000.
Commercial property purchases worth up to £1.5 million will pay less in stamp duty, while leasehold rent transactions will be charged with a 2% stamp duty rate on new leases with a net value over £5 million.
In his speech George Osborne, said:
“These reforms raise £500 million a year. And while 9% will pay more; over 90% will see their tax bills cut or stay the same.
“So, if you buy a pub in the Midlands worth, say, £270,000, you would today pay over £8,000 in stamp duty. From tomorrow you will pay just £3,000.”
Rob Mayo, commercial property insurance specialist at NFU Mutual, said:
“Business owners will benefit from a reduction in or the removal of stamp duty on commercial property purchases however landlords will actually pay an extra 3 per cent.
“Coupled with the fact that neither will they qualify for a reduction in capital gains tax, landlords are being penalised for their choice of business enterprise and this could deter new landlords entering the market.”