A Quick Reminder

December 15th, 2009

Unless further announcements are made in the Pre-Budget Report on the 9th December, measures put in place by the Government regarding Stamp Duty Land Tax and VAT are due to end shortly.

Stamp Duty Land Tax

With effect from 3rd September 2008, the threshold above which Stamp Duty Land Tax becomes payable on the purchase of a residential property was increased from £125,000 to £175,000.  This new higher limit was initially set for a period of one year only, but was subsequently extended by the chancellor in this year’s budget until 31st December 2009.

If the purchase price is more than £175,000, Stamp Duty Land Tax is payable between 1% and 4% on the whole purchase price, with the percentage paid dependant on the price band applying.

For anyone who is currently purchasing a house for between £125,000 and £175,000 it would be worth trying to ensure the transaction completes before 1st January 2010 to avoid paying any Stamp Duty Land Tax.

VAT

The 2008 Pre-Budget Report announced a temporary reduction in the standard rate of VAT to 15% for a thirteen-month period from 1st December 2008 to 31st December 2009.  The standard rate will revert to 17.5% with effect from 1st January 2010.