This year’s most recent Budget has brought in new Stamp Duty Land Tax (SDLT) rates for non-residential property land purchases and leasehold transactions at a premium* above certain thresholds. Lease transactions without a premium remain unaffected save for those leases with a net present value of over £5 million will have a new 2% SDLT rate.  Those leases with a net present value of over £150,000 will continue to incur SDLT at a rate of 1%.

The new changes will mean that rather than paying SDLT on the entire value of the transaction at one rate, SDLT will only be payable on the portions of the value that fall within each bracket.

The new rates are as follows:

Purchase Price/Premium       SDLT Rates

Up to £150,000                       0%

£150,001 – £250,000               2%

Over £250,000                        5%

Using the example of a freehold commercial property purchase for £300,000, the new SDLT rates would be applied as follows:

The first £150,000 of the purchase price will incur £0 SDLT

The next £100,000 will incur SDLT of £2000 at a rate of 2%

The next £50,000 will incur SDLT of £2500 at a rate of 5%

Total SDLT payable £4500

Under the old rates, the SDLT sum payable for this transaction would have been £9000 based upon  a rate of 3%.

*Non Residential Property Transactions include:

Freehold purchases

Leasehold purchases for a premium

Leasehold assignments for a premium

The grant of a new lease for a rent but no premium

Mixed use (residential and non-residential) freehold and leasehold transactions are subject to the commercial property rates of SDLT.