Commercial Property: Law Firm Warns of Tax Relief Problems
Byline: Steve Pain
Midlands commercial property buyers are being urged by Birmingham law firm Hammonds to take advantage of the relief on stamp duty, introduced by the Chancellor earlier this year, warning there is a risk it may now be withdrawn by the European Commission.
When unveiled, Gordon Brown's policy to remove stamp duty on commercial property in disadvantaged areas was hailed as a major boost to the regeneration of inner cities.
Mike Gilbert, tax strategies solicitor at Hammonds, said: 'The Chancellor removed stamp duty on commercial property in certain disadvantaged areas to encourage greater investment in run-down areas.
'Savings are attractive and potentially very substantial, with stamp duty otherwise payable at up to four per cent of the purchase price, or 24 per cent of the annual rent.
'However, few people realise that Gordon Brown needed consent from Europe for the relief and that this is currently under review and could be withdrawn.' Large areas of Birmingham, including the whole of the city centre and a band from Edgbaston to the M6, benefit from being stamp duty free areas.
The exemption was given to certain electoral wards chosen on the basis of statistics used to measure deprivation, based upon the income of households in those wards.
Mr Gilbert said: 'This is an unusual way to identify the areas with the greatest need for property investment - Docklands, for example, qualifies. …