Following on from the Chancellor’s Budget announcement, we talk to Richard Cleminson FRICS, Professional Services Director at KFH, about the impact of the SDLT changes on commercial property transactions.
“Prior to the Budget announcement on Wednesday, Stamp Duty rates on freehold and lease premium transactions operated on a slab system. With the introduction of the slice system, those buying properties priced under £1,050,000 will be positively impacted, paying either the same or less than they were prior to mid-March 2016. Although, smaller lot sizes priced between £150,000-£1,000,000 will benefit from the new changes, I don’t believe that it will be enough to impact prices.
“Although funding for commercial property is harder to come by than for residential, and, on average, the deposit required is 25%, I believe that the demand for commercial property is likely to increase. The SDLT rise on residential buy-to-lets and the ability to put commercial property in SIPPS (self-invested personal pensions), combined with the newly introduced slice system, should see an increase potential investors’ interest.
“With the larger lot sizes priced at £2,000,000, the 1% increase is unlikely to affect demand. Instead, the buyer may take a small price adjustment into account.”
Transitional rules have put in place for those transactions which had already exchanged contracts, but had not completed on 17th March to ensure that taxpayers don’t lost out. Contact the KFH Commercial team to find out more.
Commercial properties for sale.