The government has shortened the period for paying SDLT from 30 days to 14 days.
The government has shortened the period for paying stamp duty land tax (SDLT) from 30 days to 14 days after the effective date for land or property transactions completed on or after 1 March 2019.
The deadline for submitting the land transaction return reporting the SDLT payable has also been advanced to 14 calendar days after the completion date, which does not allow much time to get the forms signed and submitted. Beware of this new deadline if you are buying a property in England or Northern Ireland. The deadlines for paying land and buildings transaction tax (LBTT) for purchases in Scotland and land transaction tax (LTT) for purchases in Wales remain at 30 days from the completion date.
When a company buys a residential property for over £40,000 it must pay an additional 3% SDLT on the entire value. This supplementary rate also applies to buying a second home. If the property is not defined as ‘residential’ it is a commercial property and the extra 3% tax does not apply.
A derelict property which is in such a poor state that it is not suitable to be lived in at the time of purchase cannot be treated as a residential property for the purposes of SDLT. If you or your company buy a derelict home to develop you should not have to pay the additional 3% rate of SDLT on that purchase. This rule should also apply for purchases in Wales and Scotland, as LBTT and LTT have similar supplementary rates for purchases of second homes, although the additional rate of LBTT in Scotland increased from 3% to 4% on 25 January 2019.
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This note was published from our Spring 2019 Tax Briefing dated March 2019
Please be aware that the information above may have changed in subsequent months.
This note is written for the general interest of our clients and is not a substitute for consulting the relevant legislation or for taking professional advice.