MAB warns: don’t get caught by stamp duty rise (From Watford Observer)

MAB warns: don’t get caught by stamp duty rise

10:05am Thursday 9th December 2010 in Business News

Watford law firm Matthew Arnold & Baldwin LLP has warned home buyers of properties valued over £1m to beware a forthcoming rise in Stamp Duty Land Tax (SDLT).

The rise, from four per cent to five per cent, is due to take effect from April 2011 and could increase the SDLT tax liability of a £1m property by at least £10,000.

The highest rate of SDLT currently chargeable is four per cent on all purchases exceeding £500, 000. When the new rules take force, from April 6, properties with a value of £1m or more will attract a five per cent SDLT charge.

The SDLT increase was originally announced by the Labour Government in the March 2010 budget, with the newly-elected Coalition Government confirming that the five per cent SDLT rate will still be brought in.

With only a matter of months left before the changes take effect, Matthew Arnold & Baldwin are warning buyers to act quickly to save money as it can take several months to sell and purchase a property. The rise is predicted to hit the South-East in particular as there are a higher proportion of million pound properties in the area.

Until relatively recently million pound properties were rare and mostly owned by the very wealthy, but now the number of million pound properties being sold is soaring.

The Halifax Million Pound Property Report shows that sales of these types of properties have doubled over the period of October 2009 to October 2010. In just the first six months of 2010 2,992 million pound properties were sold in Britain.

Richard John, Partner in the MAB Residential Team, said: “If you are thinking of buying or selling a property worth £1m or more, it would be advisable to act quickly to avoid the impending SDLT rise. Our residential property team are able to advise on all aspects of your property sale and purchase. Working alongside our wealth management team we are able to provide you with the best structure for buying and selling your real estate assets.”