Finance Bill Tracking Service 2009 | Budget 2009

BN45 STAMP DUTY LAND TAX: TEMPORARY INCREASE IN THRESHOLDS

Who is likely to be affected?

1. Individuals who are purchasing residential property between 22 April 2009 and 31 December 2009 inclusive, where the chargeable consideration for the property is no more than £175,000.

General description of the measure

2. The Chancellor announced a "holiday" from stamp duty land tax (SDLT) in September 2008, using regulation-making powers, which exempted from SDLT any acquisitions of residential property of not more than £175,000. The measure applied to acquisitions between 3 September 2008 and 2 September 2009 inclusive.

3. These regulations will be revoked and replaced with primary legislation in Finance Bill 2009. This legislation will raise the starting threshold for SDLT on residential property from £125,000 to £175,000 and will be timelimited, applying to transactions made between 22 April 2009 and 31 December 2009 inclusive. After that date the SDLT threshold for residential property will revert to £125,000.

Operative date

4. Land transactions where the effective date for SDLT purposes is on or after 22 April 2009 but before 1 January 2010.

Current law and proposed revisions

5. In September 2008 the Chancellor announced that residential property worth not more than £175,000 would be exempt from SDLT for acquisitions made between 3 September 2008 and 2 September 2009 inclusive. This measure means that the increased threshold of £175,000 for residential property will continue to apply beyond 3 September 2009 and will now end on 31 December 2009.

6. The effective date is normally the date of completion, not the date of exchange of contracts. However, the effective date may be earlier than the date of completion if the contract is substantially performed, for example, if the purchaser takes possession or pays the purchase price in advance of completion.

Further advice

7. If you have any questions about this change, please contact the Stamp Taxes Helpline on 0845 603 0135. Information about Budget measures is available on the HM Revenue & Customs website at www.hmrc.gov.uk