Chancellor targets valuable properties
22 Mar 2012
A new higher rate of stamp duty land tax (SDLT) is to be levied on properties sold for £2 million and over, the Chancellor has confirmed.
Delivering his third Budget, George Osborne revealed that homes sold over this threshold will be subject to a new 7% rate of stamp duty with immediate effect.
Residential properties sold for more than £1 million previously generated a stamp duty liability of 5%.
‘It is fair when money is tight, and so many families could do with help, that those buying the most expensive homes contribute more,’ Osborne told the House of Commons.
According to the latest figures from the Land Registry, in November 2011, 121 homes sold for more than £2 million in England and Wales. This equated to 0.2% of the 57,967 homes sold that month.
As widely anticipated, the Chancellor’s Budget also contained measures to target individuals who buy homes through a company in order to avoid paying stamp duty.
A new 15% rate of SDLT will now apply to residential properties worth over £2 million purchased by certain ‘non-natural persons’.
Osborne also revealed that the Government will consult on the introduction of an annual charge on residential properties valued at over £2 million and owned by certain non-natural persons, with the intention of introducing legislation next year and the measure coming into effect in April 2013.