Stamp Duty And Property Developers
You can benefit from knowing the rules ...
POSTED BY JONATHAN VOWLES ON 02/10/2018 @ 8:00AM
Every time you buy a house you pay loads of Stamp Duty, right? Well, sometimes the rules say you can pay less than you thought! But for a property developer, it can make the difference between a nice profit, or not ...
For property developers, Stamp Duty can make all the difference to your profit!
copyright: urfingus / 123rf
This blog post is about the tax refunds of Stamp Duty Land Tax (SDLT) that we have sorted out for our clients. Sorry I'm not going to say how much or whom ... just the why.
Most of these only apply to property developer clients, but one of them was for a lady who moved house. More importantly, can you benefit from knowing the rules and applying them in your own case?
And for any property solicitors reading this, don't forget to ask the right questions and don't process the SDLT paperwork at the full rate of tax:
A mixed property is one that is part commercial and part residential and the rules say you pay commercial rates of stamp duty which are cheaper than residential rates. A good example of this is when you buy a building that has a flat above a shop. Another example is buying a farmhouse with farmland.
More than 6 properties
If you purchase 6 or more residential properties in one transaction, ie a block of flats, then you benefit from commercial, not residential rates to make it cost less.
There are a number of very specific SDLT tax reliefs available to property companies:
Buying from a dead person's estate
Buying from someone who is relocating for employment
Buying from someone who is buying a new build
Buying to stop a chain breaking down
Like of lot of tax reliefs, there are criteria that need to be fulfilled before you can claim any of these reliefs, which makes being able to claim them dependent upon the right circumstances arising.
Buying and then selling
When you buy a house and you are already the owner of another house then you pay the extra stamp duty when buying the second house, but if you then sell the original house, i.e. you only own one house at a time, then you can get the extra SDLT you paid refunded.
We love getting tax refunds for our clients ... and we adore working with property professionals. If you would like help with your Stamp Duty then please get in touch.
"Would you like to know more?"
If you'd like to find out more about Stamp Duty then do give me a call on 01234 752 566 or click here to ping me an email and let's see how I can help you.
Until next time ...
If you're looking for a new accountant to help grow your business, do visit www.jvca.co.uk and discover how Jonathan Vowles Chartered Accountants can help you!
I've been an accountant in and for business since 1987 and have a wide experience of consultancy, audit, accounts, taxation and wealth planning work from individuals and small businesses to multinational corporations and charities.
My eclectic interests in growing and developing business span a number of areas … and can be summarised as strategic business advice and tax saving advice.
I have worked with the Chamber of Commerce to deliver courses for people about starting up in business and have lectured about tax for a major accountancy practice and for Milton Keynes College.
I relax by reading fiction and by getting away from the office in a campervan.