{"id":1418,"date":"2016-03-21T10:05:41","date_gmt":"2016-03-21T10:05:41","guid":{"rendered":"https:\/\/www.goodmanjones.com\/blog\/?p=1418"},"modified":"2021-12-08T11:38:28","modified_gmt":"2021-12-08T11:38:28","slug":"additional-sdlt-for-property-developers","status":"publish","type":"post","link":"https:\/\/www.goodmanjones.com\/blog\/additional-sdlt-for-property-developers\/","title":{"rendered":"Additional SDLT for Property Developers \u2013 What is the bottom line?"},"content":{"rendered":"

Information is starting to filter through in relation to Wednesday\u2019s budget announcement,<\/a> and it doesn\u2019t look good for developers<\/a> of residential property.<\/p>\n

The provisions, and the draft legislation included with them, apply an extra 3% SDLT (Stamp Duty Land Tax)\u00a0to purchases of additional residential property by individuals after 1 April 2016. This was a component part of the Government\u2019s commitment to provide more housing for first time buyers and families, announced in 2015\u2019s Autumn statement<\/a>.<\/p>\n

What has become apparent from Wednesday\u2019s announcements is that there is no carve-out or relief for property developers acquiring dwellings through limited companies, to develop and resell. In other words, all purchases of residential property for development by limited companies<\/a> after 1 April 2016 are subject to the additional 3% SDLT.<\/p>\n

It doesn\u2019t need an accountant to work out the impact of an additional 3% SDLT charged on a development expecting to yield a 20% return \u2013 the developer\u2019s profit will be reduced by some 15% – and yet these are the guys (and gals) who will build the houses needed to overcome the housing shortage. Go figure!<\/p>\n

So I did. I pondered this in the context of the desire to build more houses, and try in some way to link that to how Wednesday\u2019s revelations support the Government\u2019s 5 point housing strategy?<\/p>\n

It could lead traditional \u201cresidential to residential\u201d developers to look to \u201ccommercial to residential\u201d schemes? One can tie this in with the relaxation of the Permitted Development rights and conclude that perhaps the push is towards converting more office space into residential accommodation. This may favour first time buyers but is not so good for families wanting houses.<\/p>\n

One can\u2019t ignore Wednesday\u2019s announcements increasing the SDLT charges on commercial property for many schemes, although in most cases it\u2019s still likely to be less costly in terms of SDLT than residential purchases.<\/p>\n

Or maybe one can look at more provocative ideas, which have been suggested recently. The limited information available appears to exclude the additional SDLT rates for residential property if \u201cland\u201d is acquired rather than dwellings.\u00a0\u00a0 This could potentially include back-land developments (back gardens) and brownfield sites, and that would indeed be a good thing for families looking for suitable housing.<\/p>\n

And dare I say it, the Green Belt,<\/a> would also count in this, and that is an inflammatory topic indeed!<\/p>\n","protected":false},"excerpt":{"rendered":"

Information is starting to filter through in relation to Wednesday\u2019s budget announcement, and it doesn\u2019t look good for developers of residential property. The provisions, and the draft legislation included with them, apply an extra 3% SDLT (Stamp Duty Land Tax)\u00a0to purchases of additional residential property by individuals after 1 April 2016. This was a component[…] <\/p>\n

Read More<\/a><\/div>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[884,468,14],"tags":[527,102],"class_list":["post-1418","post","type-post","status-publish","format-standard","hentry","category-business-tax","category-news","category-property-construction","tag-property-developers","tag-sdlt"],"acf":[],"yoast_head":"\nAdditional SDLT for Property Developers \u2013 What is the bottom line?<\/title>\n<meta name=\"description\" content=\"The draft legislation included with them, apply an extra 3% SDLT (Stamp Duty Land Tax)\u00a0to purchases of additional residential property by individuals after 1 April 2016.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.goodmanjones.com\/blog\/additional-sdlt-for-property-developers\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Additional SDLT for Property Developers \u2013 What is the bottom line?\" \/>\n<meta property=\"og:description\" content=\"The draft legislation included with them, apply an extra 3% SDLT (Stamp Duty Land Tax)\u00a0to purchases of additional residential property by individuals after 1 April 2016.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.goodmanjones.com\/blog\/additional-sdlt-for-property-developers\/\" \/>\n<meta property=\"og:site_name\" content=\"London Chartered Accountants Blog | Goodman Jones London Accountants\" \/>\n<meta property=\"article:published_time\" content=\"2016-03-21T10:05:41+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-12-08T11:38:28+00:00\" \/>\n<meta name=\"author\" content=\"Cetin Suleyman - 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