In September 2008 the Chancellor announced that residential property costing less that £175,000 would be exempt from Stamp Duty Land Tax (commonly known as Stamp Duty) for all purchases completed between 3rd September 2008 and 2nd September 2009. The Chancellor subsequently extended this exemption until 31st December 2009. Unfortunately for purchasers of property in this price bracket there will be no further extension and the Stamp Duty Land Tax holiday for properties costing between £125,000 and £175,000 will end at the end of the year.
As of 1st January 2010 Stamp Duty Land Tax will again be charged at 1% of the purchase price for all residential property costing between £125,000 and £250,000. Any property costing less than £125,000 will continue to be exempt from the tax. The only exception to this rule is if the property you purchase lies in an area designated by the government as a "disadvantaged area", which in Scotland is determined by the property's postcode. If the property is in a disadvantaged area the threshold is raised and Stamp Duty Land Tax is not payable if the property costs £150,000 or less.
Prospective purchasers of residential property costing between £125,000 and £175,000 should therefore, where possible, look to ensure that the purchase is completed on or before 31st December 2009 in order to avoid having to pay this additional cost.
For more information on Stamp Duty Land Tax and Disadvantaged Areas please contact us.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.