Newspaper article The Evening Standard (London, England)

When the Stamp Duty Holiday Ends

Newspaper article The Evening Standard (London, England)

When the Stamp Duty Holiday Ends

Article excerpt

Byline: Fiona McNulty OUR LAWYER ANSWERS YOUR QUESTIONS

Q I HAVE just exchanged contracts on a new-build flat for which I am paying [pounds sterling]174,995. The flat should be ready in January 2010. I am told that there is currently a stamp duty exemption that finishes at the end of this year. Can you tell me what stamp duty is and how I will benefit from this "holiday"?

A SINCE September last year there has been a stamp duty land tax (SDLT) "holiday". chancellor Alistair Darling allowed a temporary exemption from the tax for people buying a home worth not more than [pounds sterling]175,000, and this expires on 31 December, 2009.

SDLT is charged as a percentage of the amount paid for a property or land where it is bought or transferred and becomes payable when the amount paid is above a certain threshold. The current threshold for residential property is [pounds sterling]175,000 and the lowest rate is one per cent. SDLT is payable on the total value of the chargeable consideration for the property, which in your case will be the purchase price of [pounds sterling]174,995.

If you complete the purchase of the flat after 31 December you will miss the SDLT holiday and liability for SDLT will arise as the threshold will revert to [pounds sterling]125,000 on i January, 2010 and so you will have to pay SDLT calculated at one per cent of the purchase price.

As this is a new-build, contact the developer to check if there is any way that the flat will be ready on, or before, 31 December, 2009 so that you will not have to pay the SDLT.

Q I AM trying to purchase my first investment property - a house that has a tenant in it at the moment. I thought that the tenant should move out before I bought the property but the seller assures me that it would be better to take on the tenant as I will then have immediate income from the rent they pay. …

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